Best Wheels Bicycle Company is looking to automate production of a framing component and will need to purchase new frame fabrication machinery. The company has narrowed the selection to 2 machines that have a useful life of 3 years. The company operates 8 hours a day, 200 days a year. Also provided below are forecasted demand for the next three years for the four models of bicycles the company produces, the cost to purchase, and the hourly operating cost. Provide year by year analysis for the next three years. Which machine would you recommend be purchased and why?

Question

Best Wheels Bicycle Company is looking to automate production of a framing component and will need to purchase new frame fabrication machinery.  The company has narrowed the selection to 2 machines that have a useful life of 3 years.  The company operates 8 hours a day, 200 days a year.  Also provided below are forecasted demand for the next three years for the four models of bicycles the company produces, the cost to purchase, and the hourly operating cost.  Provide year by year analysis for the next three years.  Which machine would you recommend be purchased and why?