1-The present worth of the Crane A Capital investment and Annual expenses over 5 years is 2-The present worth of Crane B over 20 years is $ 3-The present worth of Crane A over 20 years is $ 4-The recommended alternative is
1-The present worth of the Crane A Capital investment and Annual expenses over 5 years is 2-The present worth of Crane B over 20 years is $ 3-The present worth of Crane A over 20 years is $ 4-The recommended alternative is
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
![A steel company is trying to decide between two industrial type cranes. Crane A and Crane B are mutually exclusive, and the economics estimates for each are shown below.
Crane A
Crane B
Capital investment
Annual expenses
Salvage value
Life, in years
$15,000
$35,000
$5,000
$7,000
$4,000
20
If the MARR is 15%,
1-The present worth of the Crane A Capital investment and Annual expenses over 5 years is
65,295.83
39,765.3
-38,465.4
-14,085.8
Crane A
2-The present worth of Crane B over 20 years is $
3-The present worth of Crane A over 20 years is $
105,18.02
53,104.2
-66,296.5
Crane B
28,067.8
114 336.1
55,101.5
61,695.7
-40,6732
4-The recommended alternative is](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F33b203eb-9224-4dc4-a796-de219a9686fe%2Fbc098444-5b4b-495c-a2cd-2c02f24477c1%2F7745m8h_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A steel company is trying to decide between two industrial type cranes. Crane A and Crane B are mutually exclusive, and the economics estimates for each are shown below.
Crane A
Crane B
Capital investment
Annual expenses
Salvage value
Life, in years
$15,000
$35,000
$5,000
$7,000
$4,000
20
If the MARR is 15%,
1-The present worth of the Crane A Capital investment and Annual expenses over 5 years is
65,295.83
39,765.3
-38,465.4
-14,085.8
Crane A
2-The present worth of Crane B over 20 years is $
3-The present worth of Crane A over 20 years is $
105,18.02
53,104.2
-66,296.5
Crane B
28,067.8
114 336.1
55,101.5
61,695.7
-40,6732
4-The recommended alternative is
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