A
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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 |
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