HomeworkLib
Question

What is the present worth of a machine with an initial cost of $41,000, an annual...

What is the present worth of a machine with an initial cost of $41,000, an annual cost of $6,000 per year, a salvage value of + $12,000, a useful life of 7 years, and a financing cost rate of 5% per year?

business   economics   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Answer

PW=-intial cost -A*(P|A,i,n)+SV*(P|F,i,n)

PW=present worth

intial cost =$41000

A=annual cost=6000

SV =salvage value=$12000

PW=-41000-6000*(P|A,5%,7)+12000*(P|F,5%,7)

=-41000-6000*5.786+12000*0.7107

=-67187.6

the presnt worth of machine is -$67187.6

0 0
Add a comment
Know the answer?
Add Answer to:
What is the present worth of a machine with an initial cost of $41,000, an annual...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • What is the present worth of a machine with an initial cost of $46,000, an annual...

    What is the present worth of a machine with an initial cost of $46,000, an annual cost of $4,000 per year, a salvage value of + $10,000, a useful life of 8 years, and a financing cost rate of 5% per year?

  • What is the annual worth of a machine with a first cost of $180,000, an annual...

    What is the annual worth of a machine with a first cost of $180,000, an annual operating cost of $14,500 per year, no overhaul cost, a salvage value of $16,000, a useful life of 10 years, and a cost rate of 4% per year?

  • Calculate the present worth of all costs for a newly acquired machine with an initial cost...

    Calculate the present worth of all costs for a newly acquired machine with an initial cost of $40,000, no trade-in value, a life of 12 years, and an annual operating cost of $17,000 for the first 5 years, increasing by 10% per year thereafter. Use an interest rate of 10% per year. The present worth of all costs for a newly acquired machine is determined to be

  • Calculate the present worth of all costs for a newly acquired machine with an initial cost...

    Calculate the present worth of all costs for a newly acquired machine with an initial cost of $34,000, no trade-in value, a life of 14 years, and an annual operating cost of $17,000 for the first 3 years, increasing by 10% per year thereafter. Use an interest rate of 10% per year. The present worth of all costs for a newly acquired machine is determined to be $

  • 5-73 Given the following data, use present worth analysis to find the best alternative, A, B, or C $10,000 15,000...

    5-73 Given the following data, use present worth analysis to find the best alternative, A, B, or C $10,000 15,000 $12,000 Initial cost Annual benefit 6,000 10,000 5,000 Salvage value 1,0002,000 3,000 Useful life 4 years 3 years 2 years Use an analysis period of 12 years and 15% interest. 5-73 Given the following data, use present worth analysis to find the best alternative, A, B, or C $10,000 15,000 $12,000 Initial cost Annual benefit 6,000 10,000 5,000 Salvage value...

  • Q2. Evaluate an electronic fabrication machine on the basis of the annual worth method when the...

    Q2. Evaluate an electronic fabrication machine on the basis of the annual worth method when the MARR is 10% per year. Relevant cost data are as follows: (7 Marks) Investment cost Useful life Market (salvage) value at end of useful life Annual operating expenses Overhead cost-end of 8th year Overhead cost-end of 12th year Electronic Fabrication Machine $18,000 15 years $6,000 $450 $1000 $1500 Using Aw(i) method with short explai Please don't use excel use AW(i) factor

  • Machine X has an initial cost of $14,000. It is expected to last 10 years, to...

    Machine X has an initial cost of $14,000. It is expected to last 10 years, to cost $255 per year to maintain and to have a salvage value of $6,000 at the end of its useful life. The equivalent uniform annual cost of the machine at 7% interest is approximately _____________.

  • 5. The data for new and used machines are shown below: Initial cost($) Annual operating cost...

    5. The data for new and used machines are shown below: Initial cost($) Annual operating cost ($/year) Salvage value (5) Life (years) Used machine 15,000 8,000 5,000 New machine 40,000 2,000 10,000 Use an interest rate of 7% per year. a) Find the present worth of the new machine b) Compare the PW of the used machine to the new c) If each machine were to be funded using an annual payment load at 8%, how much would the annual...

  • Calculate the present worth of the Alternative "A". Assume the interest rate is 2% per year,...

    Calculate the present worth of the Alternative "A". Assume the interest rate is 2% per year, compounded annually. Alternative A Initial cost $1,000,000 Annual maintenance cost $50,000 Overhaul cost every 4 years $200,000 Salvage value $400,000 Useful life 40 years

  • PROBLEM NO. 4 Machine X has an initial cost of $10,000, annual maintenance of $500 per...

    PROBLEM NO. 4 Machine X has an initial cost of $10,000, annual maintenance of $500 per year, and no salvage value at the end of its four-year useful life. Machine Y costs $20,000. The first year there is no maintenance cost. The second year, maintenance is $100, and increases $100 per year in subsequent years. The machine has an anticipated $5,000 salvage value at the end of its 12-year useful life. If interest is 8%, which machine should be selected?...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT