(Solved):The CROC Co. is considering a new milling machine. They have narrowed the choices down to three…

 

Question

The CROC Co. is considering a new milling machine. They have narrowed the choices down to three alternatives in addition to the Do Nothing Alternative.

Alternative Economy Deluxe Regular
First Cost $75,000 $220,000 $125,000
Annual Benefit $28,000 $79,000 $43,000
M & O Costs $8000 $16,000 $6900
Salvage Values 3,000 0 0

All machines have a life of ten years. Using the incremental rate of return analysis which alternative should the

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