An engineer uses an economic analysis to determine which of the two machines to purchase. All the machines that are being considered are capable of performing the same task. Assume that the minimum attractive rate of return is 12% compounded monthly. What is the annual worth of the two machines? Which is the best investment Machine X Machine Y Initial cost 8,000 11,000 Estimated life 3 years 3 years Salvage value 1,000 1,500 Monthly Maint. Cost 1,500 1,475 Monthly incomes 3,550 3,475 a. EAW x = 1,784.76, EAW y = 1,646.83, X is the best investment b . EAW x = 669.51, EAW y = 807.53, Y is the best investment c. EAW x = 1,784.76, EAW y = 1,646.83, Y is the best investment d. EAW x = 807.53, EAW y = 669.51, X is the best investment
