p = .30 p = .50 p = .20 First cost $40,000 S40,000 $40,000 3,500 5,000 4,000 5,000 6,500 Annual savings 2,000 7,000 5,000 Annual costs Actual salvage value 4,000

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Crush Cola Company must purchase a bottle-capping machine. The following is known about the machine and about possible cash flows.The machine is expected to have a useful life of 10 years. Crush has a MARR of 6%. Determine the NPW of the machine.

p = .30 p = .50 p = .20
First cost
$40,000 S40,000 $40,000
3,500 5,000
4,000
5,000 6,500
Annual savings
2,000
7,000 5,000
Annual costs
Actual salvage value 4,000
Transcribed Image Text:p = .30 p = .50 p = .20 First cost $40,000 S40,000 $40,000 3,500 5,000 4,000 5,000 6,500 Annual savings 2,000 7,000 5,000 Annual costs Actual salvage value 4,000
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