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A major industrial firm desires an economic analysis to determine which of two different machines should...

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Economics

A major industrial firm desires an economic analysis todetermine which of two different machines should be purchased. Eachmachine is capable of performing the same task in a given amount oftime. Assume the minimum attractive rate of return (MARR) is 8%.The following data are to be used in your analysis:

Machine XMachine Y
First Cost$5,000$8,000
Annual Maintenance Cost$0

$150

Salvage Value$0

$2,000

Estimated Life (years)512

Which machine would you choose? Prepare Cash Flow Diagrams. Baseyour answer on annual cost.

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