A company is considering buying one of the following two computers.Computer ComputerInitial Cost $9,571.44 $13,882.9Salvage$1,896.27 $3,604.11ValueUseful Life 10 years 13 years$ 281.64 $213.58Annualyear 1 to (Year 1 to8)Maintenance10$378.24(Year 9 to13)Interest Rate6%6%If computer B was to be purchased and kept forever (after year 13) without any change inthe annual maintenance cost, what would be the present worth of all expenditures?

Answered: Image /qna-images/answer/82965e75-3cc5-42fa-85be-f2a65a7fb811.jpg

Answered: 78.24 ar 9 to 13) 6%

Business

Economics

78.24 ar 9 to 13) 6%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A company is considering buying one of the following two computers.
Computer Computer
Initial Cost $9,571.44 $13,882.9
Salvage
$1,896.27 $3,604.11
Value
Useful Life 10 years 13 years
$ 281.64 $213.58
Annual
year 1 to (Year 1 to
8)
Maintenance
10
$378.24
(Year 9 to
13)
Interest Rate
6%
6%
If computer B was to be purchased and kept forever (after year 13) without any change in
the annual maintenance cost, what would be the present worth of all expenditures?

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