A company is going to buy a new machine for manufacturing its product. Two different machines are available. Cost, operating and other expenses are as follows:Machine A
First cost - P24,000
Power per year - 1,300
Labor per year - 11,600
Maintenance per year - 2,800
Taxes and insurance - 3%
Life, years - 5
Machine B
First Cost - P30,000
Power per year - 1,360
Labor per year - 9,320
Maintenance per year - 1,900
Taxes and insurance - 3%
Life, years - 5
Money is worth 17% before taxes to the company. Which machine should be chosen?
