Economics A factory manager is considering the purchase of one of the following two production equipment. Cash flow estimates for equipment A are in year-zero dollars while those of equipment B are in actual dollarsEquipment(actual 5)Initial investmentNet annual revenueMarket value at end of useful lifeUseful life yearsThe manager uses a market interest rate of 8% per year for economic analysis. If inflation rate is expected to average 5.88% per year over the next several years, determine the PW of each equipment1. The PW of Equipment AisOA $30,510OB. $22.003OC. $16,463OD. $12,7002.The PW of Equipment B isOA $23.967Equipment A(year-zero $)OB $30,460OC. $28,01800 $16.100$9,200$3,5005013$11,600$4,500$013

Present worth is an economic concept that refers to the current value of a future stream of cash…

A factory manager is considering the purchase of one of the following two production equipment. Cash flow estimates for equipment A are in year-zero dollars while those of equipment B are in actual dollars. Equipment A (year-zero $) Equipment (actual $) Intal investment Net annual revenue 1. The PW of Equipment Ais OA $30,510 OB $22.003 OC. $16,463 OD. $12.700 $0,200 $3,500 $11,600 $4,500 50 13 10 Market value at end of useful life Useful life years 13 The manager uses a market interest rate of 8% per year for economic analysis. If inflation rate is expected to average 5.88% per year over the next several years, determine the PW of each equipment

A factory manager is considering the purchase of one of the following two production equipment. Cash flow estimates for equipment A are in year-zero dollars while those of equipment B are in actual dollars. Equipment A (year-zero $) Equipment (actual $) Intal investment Net annual revenue 1. The PW of Equipment Ais OA $30,510 OB $22.003 OC. $16,463 OD. $12.700 $0,200 $3,500 $11,600 $4,500 50 13 10 Market value at end of useful life Useful life years 13 The manager uses a market interest rate of 8% per year for economic analysis. If inflation rate is expected to average 5.88% per year over the next several years, determine the PW of each equipment

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Engineering economics