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A chemical company is considering buying a new production equipment. The following models are identified as viable candidates from the technical perspectives. The company's MARR is 8%. The estimated cash flows for each alternative are below. Suppose the cotermination assumption is made. Please round all your answers to the nearest integer. Machine A: • Capital Investment: $34,000 • Useful Life: 8 years • Market Value at the End of Life: $6,000 • Annual Revenues: $153,000 • Annual Expenses: $119,000 Machine B: • Capital Investment: $44,000 • Useful Life: 15 years • Market Value at the End of Life: $6,000 • Annual Revenues: $198,000 • Annual Expenses: $154,000 Machine C: • Capital Investment: $55,000 • Useful Life:7 years • Market Value at the End of Life: $2,000 • Annual Revenues: $247,500 • Annual Expenses: $192,500

A chemical company is considering buying a new production equipment. The following models are identified as viable candidates from the technical perspectives. The company's MARR is 8%. The estimated cash flows for each alternative are below. Suppose the cotermination assumption is made. Please round all your answers to the nearest integer. Machine A: • Capital Investment: $34,000 • Useful Life: 8 years • Market Value at the End of Life: $6,000 • Annual Revenues: $153,000 • Annual Expenses: $119,000 Machine B: • Capital Investment: $44,000 • Useful Life: 15 years • Market Value at the End of Life: $6,000 • Annual Revenues: $198,000 • Annual Expenses: $154,000 Machine C: • Capital Investment: $55,000 • Useful Life:7 years • Market Value at the End of Life: $2,000 • Annual Revenues: $247,500 • Annual Expenses: $192,500

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
Problem 1PS
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Economics

 

a) What is FW of Machine A?

b) What is FW of Machine B?

c) What is FW of Machine C?

A chemical company is considering buying a new production equipment. The following models are identified as viable candidates from the technical perspectives. The company's MARR is 8%. The estimated cash flows for each alternative are below. Suppose the cotermination assumption is made. Please round all your answers to the nearest integer. Machine A: • Capital Investment: $34,000 • Useful Life: 8 years • Market Value at the End of Life: $6,000 • Annual Revenues: $153,000 • Annual Expenses: $119,000 Machine B: • Capital Investment: $44,000 • Useful Life: 15 years • Market Value at the End of Life: $6,000 • Annual Revenues: $198,000 • Annual Expenses: $154,000 Machine C: • Capital Investment: $55,000 • Useful Life: 7 years • Market Value at the End of Life: $2,000 • Annual Revenues: $247,500 • Annual Expenses: $192,500
Transcribed Image Text:A chemical company is considering buying a new production equipment. The following models are identified as viable candidates from the technical perspectives. The company's MARR is 8%. The estimated cash flows for each alternative are below. Suppose the cotermination assumption is made. Please round all your answers to the nearest integer. Machine A: • Capital Investment: $34,000 • Useful Life: 8 years • Market Value at the End of Life: $6,000 • Annual Revenues: $153,000 • Annual Expenses: $119,000 Machine B: • Capital Investment: $44,000 • Useful Life: 15 years • Market Value at the End of Life: $6,000 • Annual Revenues: $198,000 • Annual Expenses: $154,000 Machine C: • Capital Investment: $55,000 • Useful Life: 7 years • Market Value at the End of Life: $2,000 • Annual Revenues: $247,500 • Annual Expenses: $192,500
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