9 Washington Air Company is considering the purchase of a helicopter for connecting services between the company's base airport and the new intercounty airport being built about 30 miles away. It is believed that the chopper will be needed only foreight years until the Rapid Transit Connection is phased in. The estimates on two types of helicopters under consideration, the Whirl 28 and the ROT 8, are given in the table below. Assuming that the Whirl 28 will be available in the future withidentical costs, what is the annual cost advantage of selecting the ROT 8? (Use an interest rate of 9%.)Click the icon to view the estimates on two types of helicopters under consideration.Click the icon to view the interest factors for discrete compounding when i=9% per year.C....The annual cost advantage of selecting the ROT 8 is $. (Round to the nearest dollar.More InfoSingle PaymentCompoundAmountFactorCompoundAmountFactor(F/P, i, N)(F/A, i, N)1.09001.0000- X1.18812.09001.29503.27811.41164.57311.53885.98477.52339.20041.67711.82801.99262.1719The Whirl 2B$96,000$4,000$11,000411.028513.02102.387415.1929N123456789910PresentWorthFactor(P/F, i, N)0.91740.84170.77220.70840.64990.59630.54700.50190.48040.4224Equal Payment SeriesSinking PresentFundWorthFactorFactor(A/F, i, N)(P/A, i, N)1.00000.91740.47851.75910.30512.53130.21873.23970.16713.88970.13294.48590.10875.03300.09075.53480.07685.99520.06586.4177CapitalRecoveryFactor(A/P, i, N)1.09000.56850.39510.30870.25710.22290.19870.18070.18880.1558XMore InfoFirst costAnnualmaintenanceSalvage valueUseful life inyearsDThe ROT 8$101,000$9,500$18,0008

Computing the annual equivalence costs by utilizing the following formula: AEC(i%) = (P-S)(A/P,i,n)…

Single Payment Compound Present Amount Factor Worth Factor (F/P, i, N) (P/F, i, N) 1.0900 0.9174 1.1881 0.8417 1.2950 0.7722 1.4118 0.7084 1.5388 0.6499 1.6771 0.5983 18280 05470 Compound Amount Factor (F/A, i, N) 1.0000 2.0900 3.2781 4.5731 5.9847 7.5233 9 2004 Equal Payment Series Sinking Present Fund Worth Factor Factor (A/F, i, N) (P/A, i, N) 1.0000 0.9174 0.4785 1.7591 0.3051 2.5313 0.2187 3.2397 0.1671 3.8897 0.1329 4.4859 01087 50330 Capital Recovery Factor (A/P i, N) 1.0900 0.5885 0.3951 0.3087 0.2571 0.2229 1987 More Info First cost Annual The Whirl 2B $98.000 The F $101

Single Payment Compound Present Amount Factor Worth Factor (F/P, i, N) (P/F, i, N) 1.0900 0.9174 1.1881 0.8417 1.2950 0.7722 1.4118 0.7084 1.5388 0.6499 1.6771 0.5983 18280 05470 Compound Amount Factor (F/A, i, N) 1.0000 2.0900 3.2781 4.5731 5.9847 7.5233 9 2004 Equal Payment Series Sinking Present Fund Worth Factor Factor (A/F, i, N) (P/A, i, N) 1.0000 0.9174 0.4785 1.7591 0.3051 2.5313 0.2187 3.2397 0.1671 3.8897 0.1329 4.4859 01087 50330 Capital Recovery Factor (A/P i, N) 1.0900 0.5885 0.3951 0.3087 0.2571 0.2229 1987 More Info First cost Annual The Whirl 2B $98.000 The F $101

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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