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A Slip Sheet Manufacturer Is Considering Two Machines

Question 26

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A slip sheet manufacturer is considering two machines. An engineer is asked to perform analyses to select the best machine. She prepares the following information for the evaluation. All machines have a useful life of 5 years. If the company's MARR is 4% per year, which machine should be selected.  Machine XY First costs $52,000$37,000 Annual expenses $5750$8050 Annual revenue $15,250$15,750 Salvage value $23,400$5550 IRR (%)9.105.62\begin{array} { | l | l | l | } \hline \text { Machine } & X & Y \\\hline \text { First costs } & \$ 52,000 & \$ 37,000 \\\hline \text { Annual expenses } & \$ 5750 & \$ 8050 \\\hline \text { Annual revenue } & \$ 15,250 & \$ 15,750 \\\hline \text { Salvage value } & \$ 23,400 & \$ 5550 \\\hline \text { IRR } ( \% ) & 9.10 & 5.62 \\\hline\end{array}

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Incremental IRR (X- ...

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