Hemisphere Electric may purchase equipment to manufacture a new line of wireless devices for home appliance control. The first cost of the equipment will be $78,000, and the life of the equipment is estimated to be 6 years with a salvage value of $10,000. Different people in marketing have provided revenue estimates that the devices will generate. The estimates range from a low of $10,000 to a high of $20,000, with an average of $16,000 per year. If the MARR is 9% per year, use PW to determine if these different estimates will change the decision to purchase the equipment. The present worth of low estimate range is $ The present worth of average estimate range is $ The present worth of high estimate range is $ The $10,000 revenue estimate does not favor The $16,000 revenue estimate does not favor The $20,000 revenue estimate favors the purchase. the purchase. the purchase.

Hemisphere Electric may purchase equipment to manufacture a new line of wireless devices for home appliance control. The first cost of the equipment will be $78,000, and the life of the equipment is estimated to be 6 years with a salvage value of $10,000. Different people in marketing have provided revenue estimates that the devices will generate. The estimates range from a low of $10,000 to a high of $20,000, with an average of $16,000 per year. If the MARR is 9% per year, use PW to determine if these different estimates will change the decision to purchase the equipment. The present worth of low estimate range is $ The present worth of average estimate range is $ The present worth of high estimate range is $ The $10,000 revenue estimate does not favor The $16,000 revenue estimate does not favor The $20,000 revenue estimate favors the purchase. the purchase. the purchase.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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