1. Three machines are being considered by LOG Inc. to be used in their production...
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Accounting
1. Three machines are being considered by LOG Inc. to be used in their production of a special product which the company plans to offer to the consumer market for only five years. The capital investment requirement, annual benefits and disbursements required by each machine as well as their useful lives and salvage values are given in the table below: Machines A B C Investment Cost $ 6,000 $ 7,600 $ 12,400 Useful Life ( years ) 5 7 12 Revenues $ 19,000 $ 18,000 $ 18,800 Disbursements $ 7,800 $ 7,282 $ 6,298 Depn Method Straight Line SYD Declining Balance Salvage Value $ 500 $ 600 $ 1,500 If MARR = 20% per year, which machine would you select based on: a. Future Worth Method ? b. ERR Method ?
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