An economic evaluation of the following mutually exclusive alternative equipment is being conducted. Since the equipment have different service lives, repeatability is assumed using an analysis period of 30 years. The MARR is 6% per year. Capital investment Annual revenues generated Useful life Market (salvage) value The net Annual worth of Alternative B over the analysis perio OA. $39,267 More Info Alternative A B $30,000 $90,000 $20,000 $30,000 10 years 15 years None None Discrete Compounding; /=6% Single Payment OB. $23,462 Compound OC. $16,923 Amount Present Compound Amount Factor Worth Factor Present Worth Factor Uniform Series Sinking Fund Factor OD. $41,466 To Find F To Find P OE. $20,733 Given P Given F Given A Given A Factor To Find F To Find P To Find A Capital Recovery Factor To Find A Given P Given F N F/P P/F F/A P/A A/F A/P 1 1.0600 0.9434 1.0000 0.9434 1.0000 1.0600 The net Present worth of Alternative B over the analysis perio 2 1.1236 0.8900 2.0600 1.8334 0.4854 0.5454 3 1.1910 0.8396 3.1836 2.6730 0.3141 0.3741 OA. $201,364 4 1.2625 0.7921 4.3746 3.4651 0.2286 0.2886 OB. $402,728 5 1.3382 0.7473 5.6371 4.2124 0.1774 0.2374 6 1.4185 0.7050 6.9753 4.9173 0.1434 0.2034 OC. $232,942 OD. $285.386 7 1.5036 0.6651 8.3938 5.5824 0.1191 0.1791 8 1.5938 0.6274 9.8975 6.2098 0.1010 0.1610 9 1.6895 0.5919 11.4913 6.8017 0.0870 0.1470 10 1.7908 0.5584 13 1808 7.3601 0.0759 0.1359
An economic evaluation of the following mutually exclusive alternative equipment is being conducted. Since the equipment have different service lives, repeatability is assumed using an analysis period of 30 years. The MARR is 6% per year. Capital investment Annual revenues generated Useful life Market (salvage) value The net Annual worth of Alternative B over the analysis perio OA. $39,267 More Info Alternative A B $30,000 $90,000 $20,000 $30,000 10 years 15 years None None Discrete Compounding; /=6% Single Payment OB. $23,462 Compound OC. $16,923 Amount Present Compound Amount Factor Worth Factor Present Worth Factor Uniform Series Sinking Fund Factor OD. $41,466 To Find F To Find P OE. $20,733 Given P Given F Given A Given A Factor To Find F To Find P To Find A Capital Recovery Factor To Find A Given P Given F N F/P P/F F/A P/A A/F A/P 1 1.0600 0.9434 1.0000 0.9434 1.0000 1.0600 The net Present worth of Alternative B over the analysis perio 2 1.1236 0.8900 2.0600 1.8334 0.4854 0.5454 3 1.1910 0.8396 3.1836 2.6730 0.3141 0.3741 OA. $201,364 4 1.2625 0.7921 4.3746 3.4651 0.2286 0.2886 OB. $402,728 5 1.3382 0.7473 5.6371 4.2124 0.1774 0.2374 6 1.4185 0.7050 6.9753 4.9173 0.1434 0.2034 OC. $232,942 OD. $285.386 7 1.5036 0.6651 8.3938 5.5824 0.1191 0.1791 8 1.5938 0.6274 9.8975 6.2098 0.1010 0.1610 9 1.6895 0.5919 11.4913 6.8017 0.0870 0.1470 10 1.7908 0.5584 13 1808 7.3601 0.0759 0.1359
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Transcribed Image Text:An economic evaluation of the following mutually exclusive alternative equipment is being conducted. Since the equipment have different service lives, repeatability is assumed using an
analysis period of 30 years. The MARR is 6% per year.
Capital investment
Annual revenues generated
Useful life
Market (salvage) value
The net Annual worth of Alternative B over the analysis perio
A. $39,267
More Info
Alternative
A
B
$30,000
$90,000
$20,000
$30,000
10 years
None
15 years
None
Discrete Compounding; 1=6%
Single Payment
OB. $23,462
Compound
OC. $16,923
Amount
Present
Compound
Amount
Present
Factor
Worth Factor
OD. $41,466
To Find F
To Find P
Factor
To Find F
Worth Factor
Uniform Series
Sinking
Fund
Factor
Capital
Recovery
Factor
To Find P
OE. $20,733
Given P
Given F
Given A
Given A
Given F
To Find A
To Find A
Given P
N
F/P
P/F
F/A
P/A
A/F
A/P
1
1.0600
0.9434
1.0000
0.9434
1.0000
1.0600
The net Present worth of Alternative B over the analysis perio
2
1.1236
0.8900
2.0600
1.8334
0.4854
0.5454
3
1.1910
0.8396
3.1836
2.6730
0.3141
0.3741
OA. $201,364
4
1.2625
0.7921
4.3746
3.4651
0.2286
0.2886
OB. $402,728
5
1.3382
0.7473
5.6371
4.2124
0.1774
0.2374
6
1.4185
0.7050
6.9753
4.9173
0.1434
0.2034
OC. $232,942
OD. $285.386
7
1.5036
0.6651
8.3938
5.5824
0.1191
0.1791
8
1.5938
0.6274
9.8975
6.2098
0.1010
0.1610
9
1.6895
0.5919
11.4913
6.8017
0.0870
0.1470
10
1.7908
0.5584
13.1808
7.3601
0.0759
0.1359
11
1.8983
0.5268
14.9716
7.8869
0.0668
0.1268
12
2.0122
0.4970
16.8699
8.3838
0.0593
0.1193
13
2.1329
0.4688
18.8821
8.8527
0.0530
0.1130
14
2.2609
0.4423
21.0151
9.2950
0.0476
0.1076
33033
0.4172
23.2760
9.7122
0.0430
0.1030
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