A metallurgical industry has to decide on the purchase of a machine and has two offers, the conditions of which are detailed below:
Oferta 1 Oferta 2
Initial cost 1.500.00 2.600.000
Annual operating cost 70.000 100.000
Salvage value 0 500.000
Useful life (per year) 4 6
Use the "Equivalent Uniform Annual Cost" method to decide which of the two machines is more convenient. Assume a rate of 15%.