ne of its production lines for a new contract, but it plans to sell the equipment at or before its expected life is reached at an estimated market value for used equipment. Select between the two options using the corporate MARR of 15% per year and a future worth analysis for the expected use period. Option D E First Cost $-88,000 $-98,000 AOC, per Year $-11,000 $-24,000 Expected Market Value $5,500 $14,500 Expected Use 3 years 6 years The future worth of option D is $ . The future worth of option E is $ . Option (Click to select) D E is s
ne of its production lines for a new contract, but it plans to sell the equipment at or before its expected life is reached at an estimated market value for used equipment. Select between the two options using the corporate MARR of 15% per year and a future worth analysis for the expected use period. Option D E First Cost $-88,000 $-98,000 AOC, per Year $-11,000 $-24,000 Expected Market Value $5,500 $14,500 Expected Use 3 years 6 years The future worth of option D is $ . The future worth of option E is $ . Option (Click to select) D E is s
Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter13: Capital Budgeting: Estimating Cash Flows And Analyzing Risk
Section: Chapter Questions
Problem 7P
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Question
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Parker Hannifin of Cleveland, Ohio, manufactures CNG fuel dispensers. It needs replacement equipment to streamline one of its production lines for a new contract, but it plans to sell the equipment at or before its expected life is reached at an estimated market value for used equipment.
Select between the two options using the corporate MARR of 15% per year and a future worth analysis for the expected use period.
|
Option |
D |
E |
|
First Cost |
$-88,000 |
$-98,000 |
|
AOC, per Year |
$-11,000 |
$-24,000 |
|
Expected Market Value |
$5,500 |
$14,500 |
|
Expected Use |
3 years |
6 years |
The future worth of option D is $ .
The future worth of option E is $ .
Option (Click to select) D E is selected.
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