Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 23

Xerox's iGenX high-speed commercial printers cost $1.5 billion to develop. The machines cost $500,000 to $750,000 depending on what options the client selects. Spectrum Imaging Systems is considering the purchase of a new printer based on recent contracts it received for printing weekly magazine and mail-out advertising materials. The operating costs and revenues generated are related to a large extent to the speed and other capabilities of the copier. Spectrum is considering the four machines shown below. The company uses a 3-year planning period and a MARR of 15% per year. Determine which copier the company should acquire on the basis of an incremental rate of return analysis.