1. A certain company is considering two types of machine for its operation. The data are as follows: Machine A P150,000 First cost

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Chapter1: Making Economics Decisions
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1. A certain company
is considering two
types of machine for its operation. The data
are as follows:
Machine A
First cost
P150,000
Life
4 yrs
Salvage value
P15,000
Annual operating cost
P48,000
Annual taxes
P4,200
Annual repairs
P7,200
Machine B
First cost
P200,000
Life
8 yrs
P10,000
Salvage value
Annual operating cost
P32,000
Annual taxes
P7,200
Annual repairs
P4,200
If money is worth 12% compounded
annually, compute the difference of the
annual worth of the two machines.
Transcribed Image Text:1. A certain company is considering two types of machine for its operation. The data are as follows: Machine A First cost P150,000 Life 4 yrs Salvage value P15,000 Annual operating cost P48,000 Annual taxes P4,200 Annual repairs P7,200 Machine B First cost P200,000 Life 8 yrs P10,000 Salvage value Annual operating cost P32,000 Annual taxes P7,200 Annual repairs P4,200 If money is worth 12% compounded annually, compute the difference of the annual worth of the two machines.
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