Question

Find the expected EUAW from the financial data provided in the table for a new equipment. Because of the uncertainty of technology being used in this equipment, it has not been possible to get the initial cost accurately. The annual benefit, however, is estimated to be $25,000 with a possible equipment life of 5 years. The salvage value is expected to be 10% of the initial cost. MARR 8% First Cost, $ $60,000 $80,000 $100,000 $120,000 Probability 0.25 0.35 0.30 0.10 O$5157 O$2977 O$3957 $4628

Answer 1

MARR 8 7 first Gast bo000 6000 $ Salvage Velu &000a Salvage Value 8000 first Gst l0000$ Salvaze Volu は First Gst (20 000 Salvage Value /2000 firsost expected O.25 x 60o0ot O.35 x 80000 +o3 X /oo o00 0 X/20 00o 85o00 Salvage Valu

So, pretent loorth 25oo 2SO00 85 o00- 082 08 8SOO 25000 25000 2S000 -08s 1-08 85 oo0 lo 5 6 02. -2 o602.2 $ that this deal sign oi be proitble -Ve Shoos So EUAW 20602.2 5160 $ Ans-(a)