Using Present worth Analysis, please calculate the best alternative (interest rate of 6%) 9,000 Device A A = 4,000 n = 4 years P= 10,200 3000 Device B 3500 4000 = 4 years 4500 5000
Using Present worth Analysis, please calculate the best alternative (interest rate of 6%) 9,000 Device A A = 4,000 n = 4 years P= 10,200 3000 Device B 3500 4000 = 4 years 4500 5000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Tr.21.
![7. Using Present worth Analysis, please calculate the best alternative (interest rate
of 6%)
P = 9,000
Device A
A =
P = 4 years
Initial Cost
End of useful life salvage
value
Useful life, in years
4,000
Project A
USD 100000
USD 35000
3
P= 10,200
3000
9
Device B
3500
8. Using Present worth Analysis, please calculate the best alternative (interest rate
of 4.5%)
Project B
USD 110000
USD 50000
4000
11= 4 years
4500
9. Bonus question, please calculate the internal rate of return (IRR) for the Project
B from question 8.
5000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbc8d9232-38be-41e2-acdc-e4026edb330c%2F34e20a01-78a8-4f9a-b061-2b5af4ef92c0%2F5r6nr1e_processed.png&w=3840&q=75)
Transcribed Image Text:7. Using Present worth Analysis, please calculate the best alternative (interest rate
of 6%)
P = 9,000
Device A
A =
P = 4 years
Initial Cost
End of useful life salvage
value
Useful life, in years
4,000
Project A
USD 100000
USD 35000
3
P= 10,200
3000
9
Device B
3500
8. Using Present worth Analysis, please calculate the best alternative (interest rate
of 4.5%)
Project B
USD 110000
USD 50000
4000
11= 4 years
4500
9. Bonus question, please calculate the internal rate of return (IRR) for the Project
B from question 8.
5000
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