Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 42

An engineer must recommend one of two rapid prototyping machines for integration into an upgraded manufacturing line. She obtained estimates from salespeople from two companies. Salesman A gave her the estimates in constant value (today's) dollars, while saleswoman B provided the estimates in future (then current) dollars. The company's MARR is equal to the real rate of return of 20% per year, and inflation is estimated at 4% per year. Use PW analysis to determine which machine the engineer should recommend.