A company plans to spend $ 153703 to install a new machine. Annual maintenance cost is$ 11339. Estimated annual income is $ 34805 starting in the first year. This revenue begin increasing by $ 1472 per year at the end of 2nd year and continue increasing through the end of 15 years. The market value of the machine is $ 22385 at the end of study period of 15 years. Determine the annual worth if the minimum attractive rate of return is 9% per year.
A company plans to spend $ 153703 to install a new machine. Annual maintenance cost is$ 11339. Estimated annual income is $ 34805 starting in the first year. This revenue begin increasing by $ 1472 per year at the end of 2nd year and continue increasing through the end of 15 years. The market value of the machine is $ 22385 at the end of study period of 15 years. Determine the annual worth if the minimum attractive rate of return is 9% per year.
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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Transcribed Image Text:A company plans to spend $ 153703 to install a new machine. Annual maintenance cost is $
11339. Estimated annual income is $ 34805 starting in the first year. This revenue begin
increasing by $ 1472 per year at the end of 2nd year and continue increasing through the end of
15 years. The market value of the machine is $ 22385 at the end of study period of 15 years.
Determine the annual worth if the minimum attractive rate of return is 9% per year.
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