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:
![\text{Machine A}=10\cdot 120(\$40)\\\text{Machine A}=\$48,000](https://tex.z-dn.net/?f=%5Ctext%7BMachine%20A%7D%3D10%5Ccdot%20120%28%5C%2440%29%5C%5C%5Ctext%7BMachine%20A%7D%3D%5C%2448%2C000)
![\text{Machine B}=10\cdot \$100(\$40)\\\text{Machine A}=\$40,000](https://tex.z-dn.net/?f=%5Ctext%7BMachine%20B%7D%3D10%5Ccdot%20%5C%24100%28%5C%2440%29%5C%5C%5Ctext%7BMachine%20A%7D%3D%5C%2440%2C000)
Now, we will find overall cost of machines A and B by adding initial cost, power consumption for 10 years and maintenance cost as:
![\text{Overall cost of machine A}=\$40,000+\$48,000+\$30,000](https://tex.z-dn.net/?f=%5Ctext%7BOverall%20cost%20of%20machine%20A%7D%3D%5C%2440%2C000%2B%5C%2448%2C000%2B%5C%2430%2C000)
![\text{Overall cost of machine A}=\$118,000](https://tex.z-dn.net/?f=%5Ctext%7BOverall%20cost%20of%20machine%20A%7D%3D%5C%24118%2C000)
![\text{Overall cost of machine B}=\$50,000+\$40,000+\$20,000](https://tex.z-dn.net/?f=%5Ctext%7BOverall%20cost%20of%20machine%20B%7D%3D%5C%2450%2C000%2B%5C%2440%2C000%2B%5C%2420%2C000)
![\text{Overall cost of machine B}=\$110,000](https://tex.z-dn.net/?f=%5Ctext%7BOverall%20cost%20of%20machine%20B%7D%3D%5C%24110%2C000)
Therefore, the overall cost of machines A and B are $118,000 and $110,000, respectively and option C is the correct choice.