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2 answers:
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Answer:
C. $118,000 and $110,000, respectively.
Step-by-step explanation:
Please consider the complete question.
An automobile firm wants to purchase either machine A or machine B. The intial cost of machines A and B are $40,000 and $50,000, respectively. The power consumption per year of machines A and B are 120 MWh and 100 MWh, respectively. The power cost is $40/MWh. The estimated operating and maintenance cost over 10 years is $30,000 for machine A and $20,000 for machine B.
First of all, we will find the amount spent on power consumption for 10 years by each machine as:
Now, we will find overall cost of machines A and B by adding initial cost, power consumption for 10 years and maintenance cost as:
Therefore, the overall cost of machines A and B are $118,000 and $110,000, respectively and option C is the correct choice.