Don Garlis is a landscaper. He is considering the purchase of a new commercial lawn mower, either the Atlas or the Zippy. Construct a choice table for the interest rates of 0-100%. Atlas Zippy Initial cost $6,700 $16,900 Annual maintenance cost $1,500 $1,200 Annual benefit $4,000 $4,500 Salvage value $1,000 $3,500 Useful live, in years 3 6

Don Garlis is a landscaper. He is considering the purchase of a new commercial lawn mower, either the Atlas or the Zippy. Construct a choice table for the interest rates of 0-100%. Atlas Zippy Initial cost $6,700 $16,900 Annual maintenance cost $1,500 $1,200 Annual benefit $4,000 $4,500 Salvage value $1,000 $3,500 Useful live, in years 3 6

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Don Garlis is a landscaper. He is considering the purchase of a new commercial lawn mower, either the Atlas or the
Zippy. Construct a choice table for the interest rates of 0-100%.
Atlas Zippy
Initial cost
$6,700 $16,900
Annual maintenance cost $1,500 $1,200
Annual benefit
$4,000 $4,500
Salvage value
$1,000 $3,500
Useful live, in years
3
6

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Step 1: Introduce the concept of EUAC and present value.

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Step 2: Write the given information in excel.

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Step 3: Write the formulas in the corresponding cells

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Step 4: Construct a choice table for interest rates 0% to 100%.

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Step 5: Add Graph for EUAC

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