You are ordering new equipment for the boss. Machine 1 will save $5,000 per year for 6 years; Machine 2 will save $6,000 per year for 5 years. Assume an interest rate of 10% compounded annually. What is the future value of savings from Machine 1 and Machine 2 in Year 6? Which machine should you select?
a) $38,578, $40,294, choose Machine 1
b) $38,578, $40,294, choose Machine 2
c) $38,578, $36,631, choose Machine 1
d) $38,578, $36,631, choose Machine 2

Joint cost cheyenne, inc. produces three products from a common input. the joint costs for a typical quarter follow: direct materials $45,000 direct labor 55,000 overhead 60,000 the revenues from each product are as follows: product a $75,000 product b 80,000 product c 30,000 management is considering processing product a beyond the split-off point, which would increase the sales value of product a to $116,000. however, to process product a further means that the company must rent some special equipment costing $17,500 per quarter. additional materials and labor also needed would cost $12,650 per quarter. a. what is the gross profit currently being earned by the three products for one quarter? $answer b. what is the effect on quarterly profits if the company decides to process product a further? $answer