As a project engineer, you received the AW analysis below from the finance department. It is for a new piece of equipment you ordered some months ago. You were told the interest rate used was 10% per year, but no first cost or projected salvage value was provided and you want to know them. Determine the values of P and S using the AW values for the year 3. Note: The AW values are equivalent values through the given year, not costs for the single year. Years Retained AW of First Cost, $ AW of Operating Cost, $ per Year AW of Salvage Value, $ 1 -51,700 -15,000 35,000 234 -27,091 -17,000 13,810 -18,899 -19,000 6,648 -14,827 -21,000 4,309 5 -12,398 -23,000 2,457 The value of P is $ 25,149.07 and the value of S is $ 8,853.89 Х
As a project engineer, you received the AW analysis below from the finance department. It is for a new piece of equipment you ordered some months ago. You were told the interest rate used was 10% per year, but no first cost or projected salvage value was provided and you want to know them. Determine the values of P and S using the AW values for the year 3. Note: The AW values are equivalent values through the given year, not costs for the single year. Years Retained AW of First Cost, $ AW of Operating Cost, $ per Year AW of Salvage Value, $ 1 -51,700 -15,000 35,000 234 -27,091 -17,000 13,810 -18,899 -19,000 6,648 -14,827 -21,000 4,309 5 -12,398 -23,000 2,457 The value of P is $ 25,149.07 and the value of S is $ 8,853.89 Х
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Transcribed Image Text:As a project engineer, you received the AW analysis below from the finance department. It is for a new piece of equipment you
ordered some months ago. You were told the interest rate used was 10% per year, but no first cost or projected salvage value was
provided and you want to know them. Determine the values of P and S using the AW values for the year 3. Note: The AW values are
equivalent values through the given year, not costs for the single year.
Years Retained AW of First Cost, $
AW of Operating Cost, $ per Year
AW of Salvage Value, $
1
-51,700
-15,000
35,000
234
-27,091
-17,000
13,810
-18,899
-19,000
6,648
-14,827
-21,000
4,309
5
-12,398
-23,000
2,457
The value of P is $ 25,149.07 and the value of S is $ 8,853.89
Х
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