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Question: a new semiautomatic machine costs 80000 and is expected...

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A new semi-automatic machine costs 80,000 and is expected to generate revenues of 40,000 per year for 6 years. It will cost 25,000 per year to operate the machine. At the end of 6 years, the machine will have a salvage value of 10,000. Evaluate the investment in this machine using all four methods (payback period, present worth, uniform annual cost (UAC), and rate of return Neglect the salvage value for the payback period method and the rate of return methods. Suppose, a completely automated machine is available for 140,000. The annual operating cost is 10,000 and the service life is expected to be 7 years. The salvage value of this equipment at the end of this period is 25,000. Revenues from this alternative too are 50,000 per year. Use the UAC method to compare this investment alternative with the semi-automatic machine investment. use a rate of return of 15% where necessary. (30 points)

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