Company X is purchasing a new machine for $949700. The annual expenses, in today's dollars, is estimated to be $92400. Assume that the inflation rate is 0.08 and the company X' real MARR is 0.11 per year. The depreciation for this type of machine is best represented using the declining-balance method where R = 0.26. The project is estimated to last for 10 years. a) What is the BV at year 7? b) What is the PW of these expenses? c) What is the actual value of MARR?
Company X is purchasing a new machine for $949700. The annual expenses, in today's dollars, is estimated to be $92400. Assume that the inflation rate is 0.08 and the company X' real MARR is 0.11 per year. The depreciation for this type of machine is best represented using the declining-balance method where R = 0.26. The project is estimated to last for 10 years. a) What is the BV at year 7? b) What is the PW of these expenses? c) What is the actual value of MARR?
Chapter1: Making Economics Decisions
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i want following required A,B and C
![Company X is purchasing a new machine for $949700. The annual expenses, in today's dollars, is estimated to be $92400. Assume that the inflation rate is 0.08 and the company X' real MARR is
0.11 per year. The depreciation for this type of machine is best represented using the declining-balance method where R = 0.26. The project is estimated to last for 10 years.
a) What is the BV at year 7?
b) What is the PW of these expenses?
c) What is the actual value of MARR?
Knowing that the project will last for 10 years, what minimum Uniform Annual Revenue, in actual dollars, would this machine need to generate to benefit?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9ea661db-6864-4d67-ad62-da38dc7d3ad5%2Fae8748ed-e1e8-4e1d-b93d-3311300d0ca1%2Flyfrek_processed.png&w=3840&q=75)
Transcribed Image Text:Company X is purchasing a new machine for $949700. The annual expenses, in today's dollars, is estimated to be $92400. Assume that the inflation rate is 0.08 and the company X' real MARR is
0.11 per year. The depreciation for this type of machine is best represented using the declining-balance method where R = 0.26. The project is estimated to last for 10 years.
a) What is the BV at year 7?
b) What is the PW of these expenses?
c) What is the actual value of MARR?
Knowing that the project will last for 10 years, what minimum Uniform Annual Revenue, in actual dollars, would this machine need to generate to benefit?
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