The cost characteristics of a CO testing machine that was purchased 5 years ago for $100,000 are shown below. The equation to determine the AW of retaining the tester one more year and then replacing it is: (a) AW = −15,000(A/P,i,1) − 54,000 + 10,000(A/F,i,1) (b) AW = −100,000(A/P,i,6) − 54,000 + 10,000(A/F,i,6) (c) AW = −60,000(A/P,i,1) − 42,000 + 40,000(A/F,i,1) (d ) AW = −100,000(A/P,i,5) − 42,000 + 15,000(A/F,i,5) Machine Age, Years from Purchase M&O Costs, $ per Year Salvage Value at End of Year, $ 1 42,000 60,000 2 47,000 40,000 3 49,000 31,000 4 50,000 24,000 5 52,000 15,000 6 54,000 10,000 7 63,000 10,000 8 67,000 10,000
The cost characteristics of a CO testing machine that was purchased 5 years ago for $100,000 are shown below. The equation to determine the AW of retaining the tester one more year and then replacing it is: (a) AW = −15,000(A/P,i,1) − 54,000 + 10,000(A/F,i,1) (b) AW = −100,000(A/P,i,6) − 54,000 + 10,000(A/F,i,6) (c) AW = −60,000(A/P,i,1) − 42,000 + 40,000(A/F,i,1) (d ) AW = −100,000(A/P,i,5) − 42,000 + 15,000(A/F,i,5) Machine Age, Years from Purchase M&O Costs, $ per Year Salvage Value at End of Year, $ 1 42,000 60,000 2 47,000 40,000 3 49,000 31,000 4 50,000 24,000 5 52,000 15,000 6 54,000 10,000 7 63,000 10,000 8 67,000 10,000
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
Section: Chapter Questions
Problem 1PS
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Question
The cost characteristics of a CO testing machine
that was purchased 5 years ago for $100,000 are
shown below. The equation to determine the AW
of retaining the tester one more year and then replacing
it is:
(a) AW = −15,000(A/P,i,1) − 54,000
+ 10,000(A/F,i,1)
(b) AW = −100,000(A/P,i,6) − 54,000
+ 10,000(A/F,i,6)
(c) AW = −60,000(A/P,i,1) − 42,000
+ 40,000(A/F,i,1)
(d ) AW = −100,000(A/P,i,5) − 42,000
+ 15,000(A/F,i,5)
Machine Age, Years
from Purchase
M&O Costs,
$ per Year
Salvage Value
at End of Year, $
1 42,000 60,000
2 47,000 40,000
3 49,000 31,000
4 50,000 24,000
5 52,000 15,000
6 54,000 10,000
7 63,000 10,000
8 67,000 10,000
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