You have been asked to determine the most fınancially advantageous option for a new Product Packaging machine. It has been determined by the Market Department that product packaging actually makes a difference in the anticipated Yearly Revenue generated by this product and have been provided below The director now wants an annual worth analysis performed on the two final designs based on a shortened project life of only 9 years. Compare the alternatives at the MARR of 10% per year. (all dollar values are in thousands) Packaging Packaging Machine Design Machine Design A B First Cost, $ -900 -1,500 AOC, $ per year -200 -300 Salvage value, S$ (after 7 years of use) Salvage value, S (after 3 years of use) 200 100 Salvage value, $ (after 2 years of use) 20 50 Annual revenue, S per year 800 900 Life, years 3 AW (ŠK per year) for one full life 268.312 312.967 cycle AW for a particle life of 2 years ($K 90.953 -240.476 per year) Assuming that the AW values for Designs A and B provided in the table are correct, which of the following equations presented below will generate the correc AW value for Design B with a nine (9) year period of need?
You have been asked to determine the most fınancially advantageous option for a new Product Packaging machine. It has been determined by the Market Department that product packaging actually makes a difference in the anticipated Yearly Revenue generated by this product and have been provided below The director now wants an annual worth analysis performed on the two final designs based on a shortened project life of only 9 years. Compare the alternatives at the MARR of 10% per year. (all dollar values are in thousands) Packaging Packaging Machine Design Machine Design A B First Cost, $ -900 -1,500 AOC, $ per year -200 -300 Salvage value, S$ (after 7 years of use) Salvage value, S (after 3 years of use) 200 100 Salvage value, $ (after 2 years of use) 20 50 Annual revenue, S per year 800 900 Life, years 3 AW (ŠK per year) for one full life 268.312 312.967 cycle AW for a particle life of 2 years ($K 90.953 -240.476 per year) Assuming that the AW values for Designs A and B provided in the table are correct, which of the following equations presented below will generate the correc AW value for Design B with a nine (9) year period of need?
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
![10.835
.0923
98.347
9.077
7.458
67.696
25
26
27
11.918
13.110
14.421
15.863
17.449
.00916
00826
.00745
00673
00608
1092
1083
1075
.1067
1061
0839
0763
109.182
121,100
134.210
148.631
164.494
9.161
7.619
7.770
7.914
69.794
71.777
73.650
75.415
77.077
26
9.237
9.307
9.370
9.427
27
28
29
30
0693
0630
0573
28
8.049
8.176
29
30
31
32
33
19.194
21.114
23.225
25.548
28.102
0521
0474
0431
0391
0356
.00550
.00497
.00450
.00407
00369
1055
1050
1045
1041
1037
181.944
201.138
222.252
245.477
271.025
9.479
9.526
9.569
9.609
8.296
8.409
8.515
8615
8.709
78.640
80.108
81.486
2.777
83.987
31
32
33
34
35
34
35
9.644
40
45
45.259
72.891
10221
0137
00226
00 139
00O86
1023
1014
442 593
718.905
9.779
9.863
9.096
9.374
88.953
92.454
94.889
96.562
97.701
40
45
50
117.391
189.059
304 482
00852
00529
00328
00204
1009
.1005
1003
1 163.9
1 880.6
3034.8
9.915
9.947
9 967
9570
9.708
9 802
55
60
.00053
55
00033
00020
00013
00008
00005
00003
65
490.371
789.748
1002
1001
1001
1000
4 893 7
9.867
9.980
9.987
98.471
98.987
65
70
00127
7887.5
9.911
70
75
s0
85
1271.9
2048.4
3299.0
00079
99 332
99 561
99.712
12709.0
9.992
9.995
9.941
9.961
9.974
75
100049
00030
20474.0
32979.7
30
1000
9.997
90
5313.0
95
8556.7
137806
00019
00012
00007
00002
.00001
00001
1000
1000
53120.3
85 556.9
137 796 3
99 812
99.877
99 920
9.998
9.983
9.989
9.993
90
95
100
9.999
100
1000
9.999
[312.967)(P/A 10,7) + (-240.476)(P/A 10,2)(P/F 10,7)](A/P 10,9)
[(312.967)(P/A 10,7) + (-240.476)(P/A 10,2)(F/P 10,7)
O[312.967)(P/A 10,7) + (-240.476)(P/A 10,2)XF/P 10,7)(A/P 10,9)
[(312.967)(P/A 10,7) + (-240.476)(P/A 10.2)(A/P 10.9)
[(312.967 7) + (-240.476 2)(A/P 10.9)
None of the equations presented will provide the correct value of AW for Design B over a 9 year Period of Need.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9c2958c2-088a-4c9f-b425-667be7458fd5%2Faa5b9be0-9fef-4e18-84ef-96173b6b3286%2Feg5i0eg_processed.jpeg&w=3840&q=75)
Transcribed Image Text:10.835
.0923
98.347
9.077
7.458
67.696
25
26
27
11.918
13.110
14.421
15.863
17.449
.00916
00826
.00745
00673
00608
1092
1083
1075
.1067
1061
0839
0763
109.182
121,100
134.210
148.631
164.494
9.161
7.619
7.770
7.914
69.794
71.777
73.650
75.415
77.077
26
9.237
9.307
9.370
9.427
27
28
29
30
0693
0630
0573
28
8.049
8.176
29
30
31
32
33
19.194
21.114
23.225
25.548
28.102
0521
0474
0431
0391
0356
.00550
.00497
.00450
.00407
00369
1055
1050
1045
1041
1037
181.944
201.138
222.252
245.477
271.025
9.479
9.526
9.569
9.609
8.296
8.409
8.515
8615
8.709
78.640
80.108
81.486
2.777
83.987
31
32
33
34
35
34
35
9.644
40
45
45.259
72.891
10221
0137
00226
00 139
00O86
1023
1014
442 593
718.905
9.779
9.863
9.096
9.374
88.953
92.454
94.889
96.562
97.701
40
45
50
117.391
189.059
304 482
00852
00529
00328
00204
1009
.1005
1003
1 163.9
1 880.6
3034.8
9.915
9.947
9 967
9570
9.708
9 802
55
60
.00053
55
00033
00020
00013
00008
00005
00003
65
490.371
789.748
1002
1001
1001
1000
4 893 7
9.867
9.980
9.987
98.471
98.987
65
70
00127
7887.5
9.911
70
75
s0
85
1271.9
2048.4
3299.0
00079
99 332
99 561
99.712
12709.0
9.992
9.995
9.941
9.961
9.974
75
100049
00030
20474.0
32979.7
30
1000
9.997
90
5313.0
95
8556.7
137806
00019
00012
00007
00002
.00001
00001
1000
1000
53120.3
85 556.9
137 796 3
99 812
99.877
99 920
9.998
9.983
9.989
9.993
90
95
100
9.999
100
1000
9.999
[312.967)(P/A 10,7) + (-240.476)(P/A 10,2)(P/F 10,7)](A/P 10,9)
[(312.967)(P/A 10,7) + (-240.476)(P/A 10,2)(F/P 10,7)
O[312.967)(P/A 10,7) + (-240.476)(P/A 10,2)XF/P 10,7)(A/P 10,9)
[(312.967)(P/A 10,7) + (-240.476)(P/A 10.2)(A/P 10.9)
[(312.967 7) + (-240.476 2)(A/P 10.9)
None of the equations presented will provide the correct value of AW for Design B over a 9 year Period of Need.
![You have been asked to determine the most financially advantageous option for a new Product Packaging machine. It has been determined by the Marketing
Department that product packaging actually makes a difference in the anticipated Yearly Revenue generated by this product and have been provided below.
The director now wants an annual worth analysis performed on the two final designs based on a shortened project life of only 9 years. Compare the
alternatives at the MARR of 10% per year. (all dollar values are in thousands)
Packaging
Packaging Machine Design
Machine Design A B
First Cost, $
-900
-1,500
AOC, $ per year
-200
-300
Salvage value, $ (after 7 years of use)
200
Salvage value, $ (after 3 years of use)
100
Salvage value, $ (after 2 years of use)
20
50
Annual revenue, $ per year
800
900
Life, years
3
7
AW ($K per year) for one full life
268.312
312.967
cycle
AW for a particle life of 2 years ($K
90.953
-240.476
per year)
Assuming that the AW values for Designs A and B provided in the table are correct, which of the following equations presented below will generate the correct
AW value for Design B with a nine (9) year period of need?
10%
10%
Compound Interest Factors
Uniform Payment Series
Arithmetic Gradient
Single Payment
Compound
Amount
Factor
Find F
Given P
FIP
Compound
Amount
Factor
Find F
Given A
Gradient
Uniform
Series
Gradient
Present
Worth
Present
Sinking
Fund
Factor
Capital
Recovery
Factor
Present
Worth
Factor
Find P
Given
Worth
Factor
Find P
Given A
P/A
Find A
Find A
Find A
Find P
Given G
A/G
Given G
P/G
Given F
Given P
P/F
A/F
A/P
F/A
1000
0.909
L0000
4762
3021
2135
11000
5762
20001
0.476
826
1.736
2487
1210
N264
2-100
0917
1.329
4121
3155
3.310
4 641
1.404
3.291
6962
501-9](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9c2958c2-088a-4c9f-b425-667be7458fd5%2Faa5b9be0-9fef-4e18-84ef-96173b6b3286%2Ffrudya9_processed.jpeg&w=3840&q=75)
Transcribed Image Text:You have been asked to determine the most financially advantageous option for a new Product Packaging machine. It has been determined by the Marketing
Department that product packaging actually makes a difference in the anticipated Yearly Revenue generated by this product and have been provided below.
The director now wants an annual worth analysis performed on the two final designs based on a shortened project life of only 9 years. Compare the
alternatives at the MARR of 10% per year. (all dollar values are in thousands)
Packaging
Packaging Machine Design
Machine Design A B
First Cost, $
-900
-1,500
AOC, $ per year
-200
-300
Salvage value, $ (after 7 years of use)
200
Salvage value, $ (after 3 years of use)
100
Salvage value, $ (after 2 years of use)
20
50
Annual revenue, $ per year
800
900
Life, years
3
7
AW ($K per year) for one full life
268.312
312.967
cycle
AW for a particle life of 2 years ($K
90.953
-240.476
per year)
Assuming that the AW values for Designs A and B provided in the table are correct, which of the following equations presented below will generate the correct
AW value for Design B with a nine (9) year period of need?
10%
10%
Compound Interest Factors
Uniform Payment Series
Arithmetic Gradient
Single Payment
Compound
Amount
Factor
Find F
Given P
FIP
Compound
Amount
Factor
Find F
Given A
Gradient
Uniform
Series
Gradient
Present
Worth
Present
Sinking
Fund
Factor
Capital
Recovery
Factor
Present
Worth
Factor
Find P
Given
Worth
Factor
Find P
Given A
P/A
Find A
Find A
Find A
Find P
Given G
A/G
Given G
P/G
Given F
Given P
P/F
A/F
A/P
F/A
1000
0.909
L0000
4762
3021
2135
11000
5762
20001
0.476
826
1.736
2487
1210
N264
2-100
0917
1.329
4121
3155
3.310
4 641
1.404
3.291
6962
501-9
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