Using the below details, answer the following questions. Use interest rate = 10% (must show your work): Machine Initial Cost, $ AOC, $/Year Annual Revenue, $ / year Salvage Value Life, Years X -146,000 -15,000 80,000 10,000 3 Y -220000 -10,000 75,000 25,000 6 a. In comparing the alternatives on a present worth basis, determine the PW for both machine X and Y. Using your answer, which alternative would you select? c. Determine the capitalized cost of both machine X and Y b. In comparing the alternatives on a future worth basis, determine the FW for both machine X and Y. Using your answer, which alternative would you select?

Using the below details, answer the following questions. Use interest rate = 10% (must show your work): Machine Initial Cost, $ AOC, $/Year Annual Revenue, $ / year Salvage Value Life, Years X -146,000 -15,000 80,000 10,000 3 Y -220000 -10,000 75,000 25,000 6 a. In comparing the alternatives on a present worth basis, determine the PW for both machine X and Y. Using your answer, which alternative would you select? c. Determine the capitalized cost of both machine X and Y b. In comparing the alternatives on a future worth basis, determine the FW for both machine X and Y. Using your answer, which alternative would you select?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 10E

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