Mr.Andi plans to purchase a new printing machine. He has already received the offering from two printing vendors with the detailed quotation below. Vendor-1 Vendor-2 23.000.000 Initial Cost (IDR) Operation and Maintenance cost, (IDR/year) Salvage value (IDR) Life (years) -20.000.000 -8.500.000 1.000.000 6 -8.100.000 2.000.000 Assuming that Mr.Andi considers the MARR 10% per year, the business is expected to be eighteen years in service: (a) Based on a basis PW calculation, determine which vendor is expected to be considered by Mr.Andi. (b) All printing machines have a lifetime limitation of five years. Considering this situation, Mr. Andi has a standard practice of evaluating all options in line with that period. Assume that the salvage values are not expected to change, and If Mr.Andi uses a study period as exactly that period, which vendor should be chosen by Mr.Andi?
Mr.Andi plans to purchase a new printing machine. He has already received the offering from two printing vendors with the detailed quotation below. Vendor-1 Vendor-2 23.000.000 Initial Cost (IDR) Operation and Maintenance cost, (IDR/year) Salvage value (IDR) Life (years) -20.000.000 -8.500.000 1.000.000 6 -8.100.000 2.000.000 Assuming that Mr.Andi considers the MARR 10% per year, the business is expected to be eighteen years in service: (a) Based on a basis PW calculation, determine which vendor is expected to be considered by Mr.Andi. (b) All printing machines have a lifetime limitation of five years. Considering this situation, Mr. Andi has a standard practice of evaluating all options in line with that period. Assume that the salvage values are not expected to change, and If Mr.Andi uses a study period as exactly that period, which vendor should be chosen by Mr.Andi?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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J 7
Transcribed Image Text:Mr.Andi plans to purchase a new printing machine. He has already received the offering from two printing vendors with the detailed quotation below.
Vendor-1
Vendor-2
-20.000.000
-23.000.000
Initial Cost (IDR)
Operation and Maintenance cost, (IDR/year)
Salvage value (IDR)
Life (years)
-8.500.000
1.000.000
6
Assuming that Mr.Andi considers the MARR 10% per year, the business is expected to be eighteen years in service:
(a) Based on a basis PW calculation, determine which vendor is expected to be considered by Mr.Andi.
-8.100.000
2.000.000
19
(b) All printing machines have a lifetime limitation of five years. Considering this situation, Mr. Andi has a standard practice of evaluating all options in line with that period. Assume that
the salvage values are not expected to change, and If Mr.Andi uses a study period as exactly that period, which vendor should be chosen by Mr.Andi?
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