An avant- garde clothing manufacturer runs a series of high- profile, risque ads on a billboard on Highway 101 and regularly col
lects protest calls from people who are offended by them. The company has no idea how many people in total see the ads, but it has been collecting statistics on the number of phone calls from irate viewers:Type Description Number of ComplaintsR Offensive racially/ ethnically 10M Demeaning to men 4W Demeaning to women 14I Ad is incomprehensible 6O Other 2a) Depict this data with a Pareto chart. Also depict the cumula-tive complaint line.b) What percent of the total complaints can be attributed to the most prevalent complaint?
1 answer:
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Answer:
Machine B EAC is $17,705.78 more than Machine A EAC.
Explanation:
First find the present values of the cost of both machines.
Machine A:
= 200,000 + (15,000 * Present value of annuity interest factor, 15%, 8 years)
= 200,000 + ( 15,000 * 4.4873)
= $267,309.50
Machine B
= 300,000 + (17,500 * Present value of annuity interest factor, 15%, 10 years)
= 300,000 + 17,500 * 5.0188
= $387,829
Equivalent Annual cost Machine A:
= [(NPV * Required return) / 1 - (1 + Required return) ^–Number of Periods
=[(267,309.50 * 15%) / 1 - 1.15⁻⁸
= $59,569.95
Equivalent Annual cost Machine B:
= (387,829 * 15%) / (1 - 1.15⁻¹⁰)
= $77,275.73
Difference:
= 77,275.73 - 59,569.95
= $17,705.78
