A machine costs $40,000 to purchase and $10,000 per year to operate. The machine has no salvage life and a 10 year life. If i=10% per year compounded annually what is the present worth of the machine? Please show all work in steps
Costs = 40000
Maintenance costs per year = 10000
n = 10 years
i = 10 per year
The present worth of the machine would be:-
We can just use the factor values ot use the following formula to find the value of P/A
| ((1 + i)^n-1)/(i(1 + i)^n) |
40000+10000*(P/A,10%,10)
40000+10000*6.144567
= 40000+61445.67
= 101445.6
A machine costs $40,000 to purchase and $10,000 per year to operate. The machine has no...