Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![1. The annual worth for years 1 through infinity of $75,000 now, $25,000 per year in years 1 through 15 and
S40,000 per year in years 16 through infinity at a 10% interest per year is closest to:
(a) $27,500
(b) $36,000 (c) $44,000 (d) $ 19,500
1. For the estimates in table below, calculate the equivalent annual cost of the project:
First Cost, $
-950,000
Replacement Cost, year 2
AOC, $/ year
Salvage value, $
-450,000
-600,000
175,000
Life, years
4
Interst Rate %
10](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F089e785c-94ba-4880-921c-d272080384e4%2Fe44cb2e3-fdd2-4078-9a2d-77311a5dbf90%2Fyaur5ao_processed.jpeg&w=3840&q=75)
Transcribed Image Text:1. The annual worth for years 1 through infinity of $75,000 now, $25,000 per year in years 1 through 15 and
S40,000 per year in years 16 through infinity at a 10% interest per year is closest to:
(a) $27,500
(b) $36,000 (c) $44,000 (d) $ 19,500
1. For the estimates in table below, calculate the equivalent annual cost of the project:
First Cost, $
-950,000
Replacement Cost, year 2
AOC, $/ year
Salvage value, $
-450,000
-600,000
175,000
Life, years
4
Interst Rate %
10
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