You have two machines under consideration for an improved automated wrapping process for Snickers Fun Size candy bars as detailed below. (a) Using an AW analysis, determine which should be selected at i = 15% per year. (b) Assume you want machine D to be selected and are willing to extend its estimated life, if necessary. Perform this analysis to ensure D’s selection using factors or a spreadsheet.
 FIGURE 1.png)
(a) AWC = -40,000(A/P,15%,3) – 10,000 + 12,000(A/F,15%,3)
= -40,000(0.43798) – 10,000 + 12,000(0.28798)
= $-24,063
AWD = -65,000(A/P,15%,6) – 12,000 + 25,000(A/F,15%,6)
= -65,000(0.26424) – 12,000 + 25,000(0.11424)
= $-26,320
Select machine C
(b) Factors: Set AWD = AWC with nD as an unknown.
-24,063 = -65,000(A/P,15%,nD) – 12,000 + 25,000(A/F,15%,nD)
Solve by trial and error; nD is between 9 and 10 years. An expected life of 10 years will
indicate D as selected.
Spreadsheet: Use Goal Seek tool to display 9.15 years
 ANSWER.png)
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