34. Uncle Mort must choose between four pieces of comparable equipment based on the costs and salvage values given below. All four pieces have a life of 8 years. The discount rate is 12%. Determine which equipment should be selected based on the present worth analysis. Equipment Parameter A B C D First cost $25,000 $35,000 $20,000 $40,000 Annual costs $8,000 $6,000 $9,000 $5,000 Salvage value $2,500 $3,500 $2,000 $4,000
34. Uncle Mort must choose between four pieces of comparable equipment based on the costs and salvage values given below. All four pieces have a life of 8 years. The discount rate is 12%. Determine which equipment should be selected based on the present worth analysis. Equipment Parameter A B C D First cost $25,000 $35,000 $20,000 $40,000 Annual costs $8,000 $6,000 $9,000 $5,000 Salvage value $2,500 $3,500 $2,000 $4,000
Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment
Section: Chapter Questions
Problem 1CE
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do fast.

Transcribed Image Text:34. Uncle Mort must choose between four pieces of
comparable equipment based on the costs and
salvage values given below. All four pieces have a
life of 8 years. The discount rate is 12%. Determine
which equipment should be selected based on the
present worth analysis.
Equipment
Parameter
A
B
C
D
First cost
$25,000
$35,000
$20,000
$40,000
Annual costs
$8,000
$6,000
$9,000
$5,000
Salvage value
$2,500
$3,500
$2,000
$4,000
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