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4. Machine A costs $800, requires annual maintenance of $150, and will last for 10 years. Machine B costs $600, requires annual maintenance of $200, and will last for 5 years. What is the calculated present worth of machine B if the alternative will be chosen based on a present worth analysis and the required return is 10%? A. $843.31 B. $1,358.16 C. $1,721.69 D. $2,201.47 E. $2,716.47

4. Machine A costs $800, requires annual maintenance of $150, and will last for 10 years. Machine B costs $600, requires annual maintenance of $200, and will last for 5 years. What is the calculated present worth of machine B if the alternative will be chosen based on a present worth analysis and the required return is 10%? A. $843.31 B. $1,358.16 C. $1,721.69 D. $2,201.47 E. $2,716.47

Essentials Of Investments
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
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4. Machine A costs $800, requires annual maintenance of $150, and will last for 10 years. Machine B costs $600, requires annual maintenance of $200, and will last for 5 years. What is the calculated present worth of machine B if the alternative will be chosen based on a present worth analysis and the required return is 10%? A. $843.31 B. $1,358.16 C. $1,721.69 D. $2,201.47 E. $2,716.47 Answer: D
Transcribed Image Text:4. Machine A costs $800, requires annual maintenance of $150, and will last for 10 years. Machine B costs $600, requires annual maintenance of $200, and will last for 5 years. What is the calculated present worth of machine B if the alternative will be chosen based on a present worth analysis and the required return is 10%? A. $843.31 B. $1,358.16 C. $1,721.69 D. $2,201.47 E. $2,716.47 Answer: D
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