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You and your partner have become very interested in cross-country motorcycle racing and wish to purchase entry-level equipment. You have identified two alternative sets of equipment and gear. Package K has a first cost of $220000, an operating cost of $8500 per quarter, and a salvage value of $50000 after its 2-year life. Package L has a first cost of $170000 with a lower operating cost of $3900 per quarter and an estimated $27000 salvage value after its 4-year life. Which package offers the lower present worth analysis at an interest rate of 8.00% per year, compounded quarterly? (Include a minus sign if necessary.) The present worth of package K is $ and that of package L is $[ (Click to select) ✔ offers the lower present worth.

You and your partner have become very interested in cross-country motorcycle racing and wish to purchase entry-level equipment. You have identified two alternative sets of equipment and gear. Package K has a first cost of $220000, an operating cost of $8500 per quarter, and a salvage value of $50000 after its 2-year life. Package L has a first cost of $170000 with a lower operating cost of $3900 per quarter and an estimated $27000 salvage value after its 4-year life. Which package offers the lower present worth analysis at an interest rate of 8.00% per year, compounded quarterly? (Include a minus sign if necessary.) The present worth of package K is $ and that of package L is $[ (Click to select) ✔ offers the lower present worth.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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You and your partner have become very interested in cross-country motorcycle racing and wish to purchase entry-level equipment. You have identified two alternative sets of equipment and gear. Package K has a first cost of $220000, an operating cost of $8500 per quarter, and a salvage value of $50000 after its 2-year life. Package L has a first cost of $170000 with a lower operating cost of $3900 per quarter and an estimated $27000 salvage value after its 4-year life. Which package offers the lower present worth analysis at an interest rate of 8.00% per year, compounded quarterly? (Include a minus sign if necessary.) The present worth of package K is $ and that of package L is $[ (Click to select) ✔ offers the lower present worth.
Transcribed Image Text:You and your partner have become very interested in cross-country motorcycle racing and wish to purchase entry-level equipment. You have identified two alternative sets of equipment and gear. Package K has a first cost of $220000, an operating cost of $8500 per quarter, and a salvage value of $50000 after its 2-year life. Package L has a first cost of $170000 with a lower operating cost of $3900 per quarter and an estimated $27000 salvage value after its 4-year life. Which package offers the lower present worth analysis at an interest rate of 8.00% per year, compounded quarterly? (Include a minus sign if necessary.) The present worth of package K is $ and that of package L is $[ (Click to select) ✔ offers the lower present worth.
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