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A company needs to purchase a machine to fabricate a custom part used in its production process. Two machines from two differ

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Answer #1

The annual total cost of ownership = Machine price/Machine life + Annual volume/Component life*Component Cost

Machine A = 6750/4 + 63000/3500*245 = 6098 $

Machine B = 6000/2 + 63000/4500*255 = 6570 $

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