A company needs to buy a machine to produce widgets.They have narrowed their choices to the following 4 machines:
Machine W - capitalized cost = $75,800
Machine X - capitalized cost = $87,500;produces 15% more widgets a year than machine W
Machine Y - capitalized cost = $67,500;produces 10% fewer widgets a year than machine W
Machine Z - capitalized cost = $60,500;produces 20% fewer widgets a year than machine W
From a financial point of view,which machine should the company buy?

Question

Quizplus · Accepted Answer

Machine Y has the lowest capitalized cost among the machines that produce a reasonable amount of widgets compared to Machine W. It is more cost-effective than Machine W and produces only 10% fewer widgets, making it a financially sound choice.

A Company Needs to Buy a Machine to Produce Widgets