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A European candy manufacturing plant manager must select a new irradiation system to ensure the...

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Accounting

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A European candy manufacturing plant manager must select a new irradiation system to ensure the safety of specific ingredients, while being economical. The two alternatives available have the following estimates: System -155,000 60,000 3 8 -70,000 20,000 5 CFBT, $ per Year Life, Years The company is in the 35% tax bracket and assumes classical straight line depreciation for alternative comparisons performed at an after-tax minimum acceptable rate of return (MARR) of 8% per year. A salvage value of zero is used when depreciation is calculated: however, system B can be sold after 5 years for an estimated 18% of its first cost. System A has no anticipated salvage value. Determine which is more economical using an annual worth (AW) analysis worked by hand. The annual worth analysis for system A is determined to be $2140 The annual worth analysis for system B is determined to be $2386 System B is selected

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