Question

Compared to the existing plow 3. A city is considering the purchase of a new $115,000 snowplow. the new plow will operate at a savings of $550/day Assume that the plow will la and have a salvage value of $15,000. If the MARR is 10%, how many days per year must the new plow be operated to justify the purchase? What is the present worth of purchasing the new en n plow ifit is operated for 90 days/year?: $I5000 10 P -i500 0.1 27 0.0627 90) $17770 (ssso) $550 550 X:32.332 darplHeor 0.0027 A ( 10%, to) :s50ANo 6.1496

need help with the Present Worth.

Answer 1

Xinitial investment C3 initial investment 115,000 15,000 salvage value savings per day days operated in a year annual savings 6 550 49,500 10 present value annuity factor (10%, 10 years) present value factor (10%, 10 years) 6.145 0.386 12 13 14 15 16 17 18 19 20 21 S304,156.07 $5,783.15 present value of total savings present value of salvage value net worth of purchasing the worth- present value of total savings present value of salvage value initial investment net worth of purchasing the worth $304,156.07+$5,783.15 $115,000 net worth of purchasing the worth $194,939.22

for formulas and calculations, refer to the image below -

Xnitial investment C3 2 initial investment 115000 15000 salvage value 550 90 D6*D7 savings per day days operated in a year annual savings 8 10 present value annuity factor (10%, 10 years) present value factor (10%, 10 years) --PV(10%,10,1,0) -PV( 10%, 10,0,1) 12 13 14 15 16 17 18 19 20 21 D8 D10 D4 D11 present value of total savings present value of salvage value net worth of purchasing the worth-present value of total savings + present value of salvage value-initial investment net worth of purchasing the worth $304,156.07 $5,783.15 $115,000 net worth of purchasing the worth D13+D14-D3

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