Answered: 5. A used machine costs $20,000 to…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Good day! I need your help tutor please answer the question attached below. The answer is already provided, which means that will be your basis if your answers are correct or not.

Ps. In your solution, you identify the given and the what is being asked in the problem and I want to see the formula that you used and box your final answer. Don't give me a solution that is made in ms excel, I am not econ major so i'm asking for you to do the manual or the traditional computation.Lastly, don't give me a shortcut solution because i want to learn and study your computation :)

Pps. I want you to use the Present Worth Method,Annuity Worth Method, Future Worth Method .(if applicable)

5. A used machine costs $20,000 to purchase. It has an annual maintenance cost of $20,000, a salvage value of $5000,
and a 10-year life.
5a. If the interest rate is 10% per year, compounded annually, what is the present-worth cost of the machine?
Ans. P= $140, 960.12
5b. Compute the EUAC. Ans. A= $22 941.26
5c. Compute the future-worth cost of the machine. Ans. F= $365,608.25

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