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Two stamping machines are under consideration for purchase by a
metal recycling company. The manual model will cost $25,000 to buy
with an eight-year life and a $5,000 salvage value. Its annual
operating costs will be $16,000. A computer-controlled model will
cost $95,000 to buy and it will have a twelve-year life if upgraded
at the end of year six for $15,000. Its terminal salvage value will
be $23,000, with annual operating costs of $7,500 for labor and
$2,500 for maintenance. The company’s minimum attractive rate of
return is 18%. The annual worth of the computer-controlled machine
is nearest to: a. $39,620 b. $30,318 c. $29,318 d. $30,990