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Question: 30 points acme engineering needs to buy a punch press...

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(30 points) Acme Engineering needs to buy a punch press. Two companies have submitted bids to supply Acme with a punch press. Johnsons Punches will charge $150,000 to deliver and install the press. They estimate that maintenance for the press will be $4,000 per year. They state that their press will save Acme Engineering $89,000 per year. Riser Machines will charge $205,000 to deliver and install their press. Riser estimates that that maintenance for their press will be $4,300 per year. They estimate that their press will save Acme $86,000 per year. The Machine from Acme should last for 5 years; the machine from Riser will last for 10 years. Both machines should have a salvage value of $15,000 at the end of their useful lives, whenever that occurs. Assuming an interest rate of 12%, which companys machine should Acme Engineering buy? (a) Use a present worth analysis to determine your recommendation to Acme. (b) Use an annual worth analysis to determine your recommendation to Acme.
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