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s and revenues of 2 alternatives for a machine are given below. Determine which alternative is ically viable using the present value method when 20.56% annual discount rate compounded 4-

s and revenues of 2 alternatives for a machine are given below. Determine which alternative is ically viable using the present value method when 20.56% annual discount rate compounded 4-

Essentials Of Investments
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
Section: Chapter Questions
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The costs and revenues of 2 alternatives for a machine are given below. Determine which alternative is economically viable using the present value method when 20.56% annual discount rate compounded 4- month maturity. (please make numerical operation) parameters 1. machine 2. machine Initial investment cost 300 000 300 000 Salvage cost (based on initial investment cost) %25 %20 Annual operating cost for the first year 15000 15000 Annual interest rate of operating cost %18 %22 First year income 200 000 300 000 Annual decrease rate of amount of income 5000 %1.5 Economic life 10 years 16 years Show transcribed image text
Transcribed Image Text:The costs and revenues of 2 alternatives for a machine are given below. Determine which alternative is economically viable using the present value method when 20.56% annual discount rate compounded 4- month maturity. (please make numerical operation) parameters 1. machine 2. machine Initial investment cost 300 000 300 000 Salvage cost (based on initial investment cost) %25 %20 Annual operating cost for the first year 15000 15000 Annual interest rate of operating cost %18 %22 First year income 200 000 300 000 Annual decrease rate of amount of income 5000 %1.5 Economic life 10 years 16 years Show transcribed image text
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