A European candy manufacturing plant managermust select a
Chapter 17, Problem 17.49(choose chapter or problem)
A European candy manufacturing plant managermust select a new irradiation system to ensure thesafety of specific ingredients, while beingeconomical. The two alternatives available havethe following estimates:System A BFirst cost, $ 150,000 85,000CFBT, $ per year 60,000 20,000Life, years 3 5 The company is in the 35% tax bracket and assumesclassical straight line depreciation for alternative comparisons performed at an after-tax MARR of6% per year. A salvage value of zero is used whendepreciation is calculated; however, System B canbe sold after 5 years for an estimated 10% of itsfirst cost. System A has no anticipated salvagevalue. Determine which is more economical usingan AW analysis worked by hand.
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