Kiwidale Dairy is considering purchasing a new ice-cream maker. Two models, Smoothie and Creamy, are available and their information is given below. (perform all calculation using 5 significant figures, and give your final answer to 1 decimal place). (a) What is Kiwidale's MARR that makes the two alternatives equivalent? Use a present worth comparison. Smoothie 17,000 Creamy 40,000 12 years 12,000 3,920 5,400 First Cost Service Life Annual profit Annual operating cost Salvage value A MARR which makes the two alternatives equivalent in term of PW is 12 years 4,800 1,200 2,450
Kiwidale Dairy is considering purchasing a new ice-cream maker. Two models, Smoothie and Creamy, are available and their information is given below. (perform all calculation using 5 significant figures, and give your final answer to 1 decimal place). (a) What is Kiwidale's MARR that makes the two alternatives equivalent? Use a present worth comparison. Smoothie 17,000 Creamy 40,000 12 years 12,000 3,920 5,400 First Cost Service Life Annual profit Annual operating cost Salvage value A MARR which makes the two alternatives equivalent in term of PW is 12 years 4,800 1,200 2,450
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Kiwidale Dairy is considering purchasing a new ice-cream maker. Two models, Smoothie and Creamy, are available and their
information is given below. (perform all calculation using 5 significant figures, and give your final answer to 1 decimal place).
(a) What is Kiwidale's MARR that makes the two alternatives equivalent? Use a present worth comparison.
Smoothie
17,000
Creamy
40,000
12 years
12,000
3,920
5,400
First Cost
Service Life
Annual profit
Annual operating cost
Salvage value
A MARR which makes the two alternatives equivalent in term of PW is
12 years
4,800
1,200
2,450
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