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?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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