Problem
a. Compare the probable part cost from Machine A and Machine B, assuming that each will make the part to the same specification. Which machine yields the lowest part cost? Assume that the MARR = 10% per year.
b. If the cost of labor can be cut in half by using part-time employees, which machine should be recommended?
Machine A Machine B
Initial capital investment $35,000 $150,000
Life 10 years 8 years
Market value $3,500 $15,000
Parts required per year 10,000 10,000
Labor cost per hour $16 $20
Time to make one part 20 minutes 10 minutes
Maintenance cost per year $1,000 $3,000
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.