There are two machines under consideration. They will provide the same function, but there is difference in cost, benefits, life and other details. Costs, machine prices AND salvage all go up at the rate of inflation. The costs and benefits are shown for year 1. Benefits go up by the % given. Salvage costs are given for an 10 yr old machine A or a 5 yr old machine B TODAY. Adjust with inflation. Assist your employer to determine which machine is the best choice. MARR: 13.00% Inflation: 1.980% Machine A Initial Cost $13,400 Salvage $ Life Benefits $ Benefit inc Costs $ 6,100 10 Yr machine today 10 Years 7,500 per year 3.10% 2,805 Per year Machine B Initial Cost Salvage Life Benefits Benefits inc Costs $ SS $ $ $ 5,750 2,051 6 yr old machine today 5 Years 6,450 per year 2.78% 2,750 Per year
There are two machines under consideration. They will provide the same function, but there is difference in cost, benefits, life and other details. Costs, machine prices AND salvage all go up at the rate of inflation. The costs and benefits are shown for year 1. Benefits go up by the % given. Salvage costs are given for an 10 yr old machine A or a 5 yr old machine B TODAY. Adjust with inflation. Assist your employer to determine which machine is the best choice. MARR: 13.00% Inflation: 1.980% Machine A Initial Cost $13,400 Salvage $ Life Benefits $ Benefit inc Costs $ 6,100 10 Yr machine today 10 Years 7,500 per year 3.10% 2,805 Per year Machine B Initial Cost Salvage Life Benefits Benefits inc Costs $ SS $ $ $ 5,750 2,051 6 yr old machine today 5 Years 6,450 per year 2.78% 2,750 Per year
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
Related questions
Question
Am. 283.
Transcribed Image Text:Please solve via excel and show calculation steps to solve table.
There are two machines under consideration. They will provide the same function, but there is difference in cost, benefits,
life and other details. Costs, machine prices AND salvage all go up at the rate of inflation. The costs and benefits are
shown for year 1. Benefits go up by the % given. Salvage costs are given for an 10 yr old machine A or a 5 yr old machine
B TODAY. Adjust with inflation. Assist your employer to determine which machine is the best choice.
MARR: 13.00%
Inflation: 1.980%
Machine A
Initial Cost
Salvage
Life
Ś
Benefits $
Benefit inc
Costs
$
$13,400
6,100 10 Yr machine today
10 Years
7,500 Per year
3.10%
2,805 Per year
Create the net cash flow chart for both machines.
Machine B
Initial Cost
Salvage
Life
Benefits
Benefits inc
Costs
$
$
$
$
5,750
2,051 6 yr old machine today
5 Years
6,450 Per year
2.78%
2,750 Per year
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