FlowE, Inc. must buy a new flow cytometry machine to conduct its cell sorting experiments. FlowE,...
FlowE, Inc. must buy a new flow cytometry machine to conduct its cell sorting experiments. FlowE, Inc. is deciding between 2 machines to purchase - Machine A or Machine B. The annual maintenance costs over 9 years for the 2 machines are below. In addition, Machine A has an initial purchasing cost of $10,500 and will require a repair and overhaul in Year 4 that will cost $850. Machine B has an initial cost of $9,750 and will require a repair and overhaul in Year 3 that will cost $750. Machine A Machine B Year Maintenance Maintenance Costs Costs $535.00 $625.00 1 $590.00 $660.00 2 $645.00 $695.00 $700.00 $730.00 4 $755.00 $765.00 5 $810.00 $800.00 $865.00 $835.00 $870.00 $920.00 8 $905.00 $975.00 QUESTION: Assuming an interest rate of 9% per year, compute the equivalent uniform annual cost (EUAC) for each ELISA machine in a fixed output situation over 9 years using the appropriate EXCEL functions. Which machine should be purchased? WHY? Please explain and justify your choice in your EXCEL file, as well as show all your work. QUESTION: What is the Rate of Return (ROR), aka Internal Rate of Return (IRR), on your choice of machine? Explain your answer.