Calculate the present worth without considering the inflation.

Question

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Answer 1

Question

Chapter 14, Problem 29P

(a):

To determine

Calculate the present worth without considering the inflation.

(a):

Expert Solution

Explanation of Solution

Table-1 shows the cash flow of different alternatives.

Table-1

Alternative	A	B
First cost (C)	-31,000	-48,000
Annual cost (AM) per year	-28,000	-19,000
Salvage value (SV)	5,000	7,000
Time period (n)	5	5

The interest rate (i) is 10%, and the inflation rate (f) is 3%.

The present worth (PW) for Alternative A can be calculated as follows:

PW=C+AM((1+i)n−1i(1+i)n)+SV(1(1+i)n)=−31,000−28,000((1+0.1)5−10.1(1+0.1)5)+5,000(1(1+0.1)5)=−31,000−28,000(3.7908)+5,000(0.6209)=−31,000−106,143.4+3,104.5=−134,038.9

The present worth is -$134,038.9. The present worth for Alternate A can be calculated using a spreadsheet as follows:

= - PV(10%,5,-28000,5000) – 31000

The above spreadsheet function gives the value of -$134,37.42.

The present worth (PW) for Alternative B can be calculated as follows:

PW=C+AM((1+i)n−1i(1+i)n)+SV(1(1+i)n)=−48,000−19,000((1+0.1)5−10.1(1+0.1)5)+7,000(1(1+0.1)5)=−48,000−19,000(3.7908)+7,000(0.6209)=−48,000−72,025.2+4,346.3=−115,678.9.

The present worth is -$115,678.9. Since the present worth of the cost is lower for Alternate B, select Alternate B. The present worth for alternate B can be calculated using a spreadsheet as follows:

= - PV(10%,5,-19000,7000) - 48000

The above spreadsheet function gives the value of -$115,678.5.

(b):

To determine

Calculate the present worth with considering the inflation.

(b):

Expert Solution

Explanation of Solution

The real interest rate (if) can be calculated as follows:

if=i+f+i×f=0.1+0.03+0.1×0.03=0.13+0.003=0.133

The real interest rate is 13.3%.

The present worth (PW) for Alternative A can be calculated as follows:

PW=C+AM((1+if)n−1if(1+if)n)+SV(1(1+if)n)=−31,000−28,000((1+0.133)5−10.133(1+0.133)5)+5,000(1(1+0.133)5)=−31,000−28,000(3.4916)+5,000(0.5356)=−31,000−97,764.8+2,678=−126,086.8

The present worth is -$126,086.8. The present worth for Alternate A can be calculated using a spreadsheet as follows:

= - PV(13.3%,5,-28000,5000) - 31000

The above spreadsheet function gives the value of -$126,87.79.

The present worth (PW) for Alternative B can be calculated as follows:

PW=C+AM((1+if)n−1if(1+if)n)+SV(1(1+if)n)=−48,000−19,000((1+0.133)5−10.133(1+0.133)5)+7,000(1(1+0.133)5)=−48,000−19,000(3.4916)+7,000(0.5356)=−48,000−66,340.4+3,749.2=−110,591.2

The present worth is -$115,678.9. Since the present worth of the cost is lower for Alternate B, select Alternate B. The present worth for Alternate B can be calculated using a spreadsheet as follows:

= - PV(13.3%,5,-19000,7000) - 48000

The above spreadsheet function gives the value of -$110,591.83.

(c):

To determine

Calculate the interest rate that makes both the alternates equal.

(c):

Expert Solution

Explanation of Solution

The interest rate that makes both alternates’ present worth equal can be calculated using the spreadsheet as follows:

ENGR.ECONOMY CUSTOM FOR TAMU ISEN 667, Chapter 14, Problem 29P

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Answer 2

Question

Chapter 14, Problem 29P

(a):

To determine

Calculate the present worth without considering the inflation.

(a):

Expert Solution

Explanation of Solution

Table-1 shows the cash flow of different alternatives.

Table-1

Alternative	A	B
First cost (C)	-31,000	-48,000
Annual cost (AM) per year	-28,000	-19,000
Salvage value (SV)	5,000	7,000
Time period (n)	5	5

The interest rate (i) is 10%, and the inflation rate (f) is 3%.

The present worth (PW) for Alternative A can be calculated as follows:

PW=C+AM((1+i)n−1i(1+i)n)+SV(1(1+i)n)=−31,000−28,000((1+0.1)5−10.1(1+0.1)5)+5,000(1(1+0.1)5)=−31,000−28,000(3.7908)+5,000(0.6209)=−31,000−106,143.4+3,104.5=−134,038.9

The present worth is -$134,038.9. The present worth for Alternate A can be calculated using a spreadsheet as follows:

= - PV(10%,5,-28000,5000) – 31000

The above spreadsheet function gives the value of -$134,37.42.

The present worth (PW) for Alternative B can be calculated as follows:

PW=C+AM((1+i)n−1i(1+i)n)+SV(1(1+i)n)=−48,000−19,000((1+0.1)5−10.1(1+0.1)5)+7,000(1(1+0.1)5)=−48,000−19,000(3.7908)+7,000(0.6209)=−48,000−72,025.2+4,346.3=−115,678.9.

The present worth is -$115,678.9. Since the present worth of the cost is lower for Alternate B, select Alternate B. The present worth for alternate B can be calculated using a spreadsheet as follows:

= - PV(10%,5,-19000,7000) - 48000

The above spreadsheet function gives the value of -$115,678.5.

(b):

To determine

Calculate the present worth with considering the inflation.

(b):

Expert Solution

Explanation of Solution

The real interest rate (if) can be calculated as follows:

if=i+f+i×f=0.1+0.03+0.1×0.03=0.13+0.003=0.133

The real interest rate is 13.3%.

The present worth (PW) for Alternative A can be calculated as follows:

PW=C+AM((1+if)n−1if(1+if)n)+SV(1(1+if)n)=−31,000−28,000((1+0.133)5−10.133(1+0.133)5)+5,000(1(1+0.133)5)=−31,000−28,000(3.4916)+5,000(0.5356)=−31,000−97,764.8+2,678=−126,086.8

The present worth is -$126,086.8. The present worth for Alternate A can be calculated using a spreadsheet as follows:

= - PV(13.3%,5,-28000,5000) - 31000

The above spreadsheet function gives the value of -$126,87.79.

The present worth (PW) for Alternative B can be calculated as follows:

PW=C+AM((1+if)n−1if(1+if)n)+SV(1(1+if)n)=−48,000−19,000((1+0.133)5−10.133(1+0.133)5)+7,000(1(1+0.133)5)=−48,000−19,000(3.4916)+7,000(0.5356)=−48,000−66,340.4+3,749.2=−110,591.2

The present worth is -$115,678.9. Since the present worth of the cost is lower for Alternate B, select Alternate B. The present worth for Alternate B can be calculated using a spreadsheet as follows:

= - PV(13.3%,5,-19000,7000) - 48000

The above spreadsheet function gives the value of -$110,591.83.

(c):

To determine

Calculate the interest rate that makes both the alternates equal.

(c):

Expert Solution

Explanation of Solution

The interest rate that makes both alternates’ present worth equal can be calculated using the spreadsheet as follows:

ENGR.ECONOMY CUSTOM FOR TAMU ISEN 667, Chapter 14, Problem 29P

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Answer 3

Question

Chapter 14, Problem 29P

(a):

To determine

Calculate the present worth without considering the inflation.

(a):

Expert Solution

Explanation of Solution

Table-1 shows the cash flow of different alternatives.

Table-1

Alternative	A	B
First cost (C)	-31,000	-48,000
Annual cost (AM) per year	-28,000	-19,000
Salvage value (SV)	5,000	7,000
Time period (n)	5	5

The interest rate (i) is 10%, and the inflation rate (f) is 3%.

The present worth (PW) for Alternative A can be calculated as follows:

PW=C+AM((1+i)n−1i(1+i)n)+SV(1(1+i)n)=−31,000−28,000((1+0.1)5−10.1(1+0.1)5)+5,000(1(1+0.1)5)=−31,000−28,000(3.7908)+5,000(0.6209)=−31,000−106,143.4+3,104.5=−134,038.9

The present worth is -$134,038.9. The present worth for Alternate A can be calculated using a spreadsheet as follows:

= - PV(10%,5,-28000,5000) – 31000

The above spreadsheet function gives the value of -$134,37.42.

The present worth (PW) for Alternative B can be calculated as follows:

PW=C+AM((1+i)n−1i(1+i)n)+SV(1(1+i)n)=−48,000−19,000((1+0.1)5−10.1(1+0.1)5)+7,000(1(1+0.1)5)=−48,000−19,000(3.7908)+7,000(0.6209)=−48,000−72,025.2+4,346.3=−115,678.9.

The present worth is -$115,678.9. Since the present worth of the cost is lower for Alternate B, select Alternate B. The present worth for alternate B can be calculated using a spreadsheet as follows:

= - PV(10%,5,-19000,7000) - 48000

The above spreadsheet function gives the value of -$115,678.5.

(b):

To determine

Calculate the present worth with considering the inflation.

(b):

Expert Solution

Explanation of Solution

The real interest rate (if) can be calculated as follows:

if=i+f+i×f=0.1+0.03+0.1×0.03=0.13+0.003=0.133

The real interest rate is 13.3%.

The present worth (PW) for Alternative A can be calculated as follows:

PW=C+AM((1+if)n−1if(1+if)n)+SV(1(1+if)n)=−31,000−28,000((1+0.133)5−10.133(1+0.133)5)+5,000(1(1+0.133)5)=−31,000−28,000(3.4916)+5,000(0.5356)=−31,000−97,764.8+2,678=−126,086.8

The present worth is -$126,086.8. The present worth for Alternate A can be calculated using a spreadsheet as follows:

= - PV(13.3%,5,-28000,5000) - 31000

The above spreadsheet function gives the value of -$126,87.79.

The present worth (PW) for Alternative B can be calculated as follows:

PW=C+AM((1+if)n−1if(1+if)n)+SV(1(1+if)n)=−48,000−19,000((1+0.133)5−10.133(1+0.133)5)+7,000(1(1+0.133)5)=−48,000−19,000(3.4916)+7,000(0.5356)=−48,000−66,340.4+3,749.2=−110,591.2

The present worth is -$115,678.9. Since the present worth of the cost is lower for Alternate B, select Alternate B. The present worth for Alternate B can be calculated using a spreadsheet as follows:

= - PV(13.3%,5,-19000,7000) - 48000

The above spreadsheet function gives the value of -$110,591.83.

(c):

To determine

Calculate the interest rate that makes both the alternates equal.

(c):

Expert Solution

Explanation of Solution

The interest rate that makes both alternates’ present worth equal can be calculated using the spreadsheet as follows:

ENGR.ECONOMY CUSTOM FOR TAMU ISEN 667, Chapter 14, Problem 29P

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Answer 4

Question

Chapter 14, Problem 29P

(a):

To determine

Calculate the present worth without considering the inflation.

(a):

Expert Solution

Explanation of Solution

Table-1 shows the cash flow of different alternatives.

Table-1

Alternative	A	B
First cost (C)	-31,000	-48,000
Annual cost (AM) per year	-28,000	-19,000
Salvage value (SV)	5,000	7,000
Time period (n)	5	5

The interest rate (i) is 10%, and the inflation rate (f) is 3%.

The present worth (PW) for Alternative A can be calculated as follows:

PW=C+AM((1+i)n−1i(1+i)n)+SV(1(1+i)n)=−31,000−28,000((1+0.1)5−10.1(1+0.1)5)+5,000(1(1+0.1)5)=−31,000−28,000(3.7908)+5,000(0.6209)=−31,000−106,143.4+3,104.5=−134,038.9

The present worth is -$134,038.9. The present worth for Alternate A can be calculated using a spreadsheet as follows:

= - PV(10%,5,-28000,5000) – 31000

The above spreadsheet function gives the value of -$134,37.42.

The present worth (PW) for Alternative B can be calculated as follows:

PW=C+AM((1+i)n−1i(1+i)n)+SV(1(1+i)n)=−48,000−19,000((1+0.1)5−10.1(1+0.1)5)+7,000(1(1+0.1)5)=−48,000−19,000(3.7908)+7,000(0.6209)=−48,000−72,025.2+4,346.3=−115,678.9.

The present worth is -$115,678.9. Since the present worth of the cost is lower for Alternate B, select Alternate B. The present worth for alternate B can be calculated using a spreadsheet as follows:

= - PV(10%,5,-19000,7000) - 48000

The above spreadsheet function gives the value of -$115,678.5.

(b):

To determine

Calculate the present worth with considering the inflation.

(b):

Expert Solution

Explanation of Solution

The real interest rate (if) can be calculated as follows:

if=i+f+i×f=0.1+0.03+0.1×0.03=0.13+0.003=0.133

The real interest rate is 13.3%.

The present worth (PW) for Alternative A can be calculated as follows:

PW=C+AM((1+if)n−1if(1+if)n)+SV(1(1+if)n)=−31,000−28,000((1+0.133)5−10.133(1+0.133)5)+5,000(1(1+0.133)5)=−31,000−28,000(3.4916)+5,000(0.5356)=−31,000−97,764.8+2,678=−126,086.8

The present worth is -$126,086.8. The present worth for Alternate A can be calculated using a spreadsheet as follows:

= - PV(13.3%,5,-28000,5000) - 31000

The above spreadsheet function gives the value of -$126,87.79.

The present worth (PW) for Alternative B can be calculated as follows:

PW=C+AM((1+if)n−1if(1+if)n)+SV(1(1+if)n)=−48,000−19,000((1+0.133)5−10.133(1+0.133)5)+7,000(1(1+0.133)5)=−48,000−19,000(3.4916)+7,000(0.5356)=−48,000−66,340.4+3,749.2=−110,591.2

The present worth is -$115,678.9. Since the present worth of the cost is lower for Alternate B, select Alternate B. The present worth for Alternate B can be calculated using a spreadsheet as follows:

= - PV(13.3%,5,-19000,7000) - 48000

The above spreadsheet function gives the value of -$110,591.83.

(c):

To determine

Calculate the interest rate that makes both the alternates equal.

(c):

Expert Solution

Explanation of Solution

The interest rate that makes both alternates’ present worth equal can be calculated using the spreadsheet as follows:

ENGR.ECONOMY CUSTOM FOR TAMU ISEN 667, Chapter 14, Problem 29P

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Answer 5

Chapter 14, Problem 29P

(a):

To determine

Calculate the present worth without considering the inflation.

(a):

Expert Solution

Explanation of Solution

Table-1 shows the cash flow of different alternatives.

Table-1

Alternative	A	B
First cost (C)	-31,000	-48,000
Annual cost (AM) per year	-28,000	-19,000
Salvage value (SV)	5,000	7,000
Time period (n)	5	5

The interest rate (i) is 10%, and the inflation rate (f) is 3%.

The present worth (PW) for Alternative A can be calculated as follows:

PW=C+AM((1+i)n−1i(1+i)n)+SV(1(1+i)n)=−31,000−28,000((1+0.1)5−10.1(1+0.1)5)+5,000(1(1+0.1)5)=−31,000−28,000(3.7908)+5,000(0.6209)=−31,000−106,143.4+3,104.5=−134,038.9

The present worth is -$134,038.9. The present worth for Alternate A can be calculated using a spreadsheet as follows:

= - PV(10%,5,-28000,5000) – 31000

The above spreadsheet function gives the value of -$134,37.42.

The present worth (PW) for Alternative B can be calculated as follows:

PW=C+AM((1+i)n−1i(1+i)n)+SV(1(1+i)n)=−48,000−19,000((1+0.1)5−10.1(1+0.1)5)+7,000(1(1+0.1)5)=−48,000−19,000(3.7908)+7,000(0.6209)=−48,000−72,025.2+4,346.3=−115,678.9.

The present worth is -$115,678.9. Since the present worth of the cost is lower for Alternate B, select Alternate B. The present worth for alternate B can be calculated using a spreadsheet as follows:

= - PV(10%,5,-19000,7000) - 48000

The above spreadsheet function gives the value of -$115,678.5.

(b):

To determine

Calculate the present worth with considering the inflation.

(b):

Expert Solution

Explanation of Solution

The real interest rate (if) can be calculated as follows:

if=i+f+i×f=0.1+0.03+0.1×0.03=0.13+0.003=0.133

The real interest rate is 13.3%.

The present worth (PW) for Alternative A can be calculated as follows:

PW=C+AM((1+if)n−1if(1+if)n)+SV(1(1+if)n)=−31,000−28,000((1+0.133)5−10.133(1+0.133)5)+5,000(1(1+0.133)5)=−31,000−28,000(3.4916)+5,000(0.5356)=−31,000−97,764.8+2,678=−126,086.8

The present worth is -$126,086.8. The present worth for Alternate A can be calculated using a spreadsheet as follows:

= - PV(13.3%,5,-28000,5000) - 31000

The above spreadsheet function gives the value of -$126,87.79.

The present worth (PW) for Alternative B can be calculated as follows:

PW=C+AM((1+if)n−1if(1+if)n)+SV(1(1+if)n)=−48,000−19,000((1+0.133)5−10.133(1+0.133)5)+7,000(1(1+0.133)5)=−48,000−19,000(3.4916)+7,000(0.5356)=−48,000−66,340.4+3,749.2=−110,591.2

The present worth is -$115,678.9. Since the present worth of the cost is lower for Alternate B, select Alternate B. The present worth for Alternate B can be calculated using a spreadsheet as follows:

= - PV(13.3%,5,-19000,7000) - 48000

The above spreadsheet function gives the value of -$110,591.83.

(c):

To determine

Calculate the interest rate that makes both the alternates equal.

(c):

Expert Solution

Explanation of Solution

The interest rate that makes both alternates’ present worth equal can be calculated using the spreadsheet as follows:

ENGR.ECONOMY CUSTOM FOR TAMU ISEN 667, Chapter 14, Problem 29P

Answer 6

Chapter 14, Problem 29P

(a):

To determine

Calculate the present worth without considering the inflation.

(a):

Expert Solution

Explanation of Solution

Table-1 shows the cash flow of different alternatives.

Table-1

Alternative	A	B
First cost (C)	-31,000	-48,000
Annual cost (AM) per year	-28,000	-19,000
Salvage value (SV)	5,000	7,000
Time period (n)	5	5

The interest rate (i) is 10%, and the inflation rate (f) is 3%.

The present worth (PW) for Alternative A can be calculated as follows:

PW=C+AM((1+i)n−1i(1+i)n)+SV(1(1+i)n)=−31,000−28,000((1+0.1)5−10.1(1+0.1)5)+5,000(1(1+0.1)5)=−31,000−28,000(3.7908)+5,000(0.6209)=−31,000−106,143.4+3,104.5=−134,038.9

The present worth is -$134,038.9. The present worth for Alternate A can be calculated using a spreadsheet as follows:

= - PV(10%,5,-28000,5000) – 31000

The above spreadsheet function gives the value of -$134,37.42.

The present worth (PW) for Alternative B can be calculated as follows:

PW=C+AM((1+i)n−1i(1+i)n)+SV(1(1+i)n)=−48,000−19,000((1+0.1)5−10.1(1+0.1)5)+7,000(1(1+0.1)5)=−48,000−19,000(3.7908)+7,000(0.6209)=−48,000−72,025.2+4,346.3=−115,678.9.

The present worth is -$115,678.9. Since the present worth of the cost is lower for Alternate B, select Alternate B. The present worth for alternate B can be calculated using a spreadsheet as follows:

= - PV(10%,5,-19000,7000) - 48000

The above spreadsheet function gives the value of -$115,678.5.

Answer 7

Chapter 14, Problem 29P

(a):

To determine

Calculate the present worth without considering the inflation.

Answer 8

(a):

Expert Solution

Explanation of Solution

Table-1 shows the cash flow of different alternatives.

Table-1

Alternative	A	B
First cost (C)	-31,000	-48,000
Annual cost (AM) per year	-28,000	-19,000
Salvage value (SV)	5,000	7,000
Time period (n)	5	5

The interest rate (i) is 10%, and the inflation rate (f) is 3%.

The present worth (PW) for Alternative A can be calculated as follows:

PW=C+AM((1+i)n−1i(1+i)n)+SV(1(1+i)n)=−31,000−28,000((1+0.1)5−10.1(1+0.1)5)+5,000(1(1+0.1)5)=−31,000−28,000(3.7908)+5,000(0.6209)=−31,000−106,143.4+3,104.5=−134,038.9

The present worth is -$134,038.9. The present worth for Alternate A can be calculated using a spreadsheet as follows:

= - PV(10%,5,-28000,5000) – 31000

The above spreadsheet function gives the value of -$134,37.42.

The present worth (PW) for Alternative B can be calculated as follows:

PW=C+AM((1+i)n−1i(1+i)n)+SV(1(1+i)n)=−48,000−19,000((1+0.1)5−10.1(1+0.1)5)+7,000(1(1+0.1)5)=−48,000−19,000(3.7908)+7,000(0.6209)=−48,000−72,025.2+4,346.3=−115,678.9.

The present worth is -$115,678.9. Since the present worth of the cost is lower for Alternate B, select Alternate B. The present worth for alternate B can be calculated using a spreadsheet as follows:

= - PV(10%,5,-19000,7000) - 48000

The above spreadsheet function gives the value of -$115,678.5.

Answer 9

(a):

Expert Solution

Answer 10

(a):

Expert Solution

Answer 11

Expert Solution

Answer 12

(b):

To determine

Calculate the present worth with considering the inflation.

(b):

Expert Solution

Explanation of Solution

The real interest rate (if) can be calculated as follows:

if=i+f+i×f=0.1+0.03+0.1×0.03=0.13+0.003=0.133

The real interest rate is 13.3%.

The present worth (PW) for Alternative A can be calculated as follows:

PW=C+AM((1+if)n−1if(1+if)n)+SV(1(1+if)n)=−31,000−28,000((1+0.133)5−10.133(1+0.133)5)+5,000(1(1+0.133)5)=−31,000−28,000(3.4916)+5,000(0.5356)=−31,000−97,764.8+2,678=−126,086.8

The present worth is -$126,086.8. The present worth for Alternate A can be calculated using a spreadsheet as follows:

= - PV(13.3%,5,-28000,5000) - 31000

The above spreadsheet function gives the value of -$126,87.79.

The present worth (PW) for Alternative B can be calculated as follows:

PW=C+AM((1+if)n−1if(1+if)n)+SV(1(1+if)n)=−48,000−19,000((1+0.133)5−10.133(1+0.133)5)+7,000(1(1+0.133)5)=−48,000−19,000(3.4916)+7,000(0.5356)=−48,000−66,340.4+3,749.2=−110,591.2

The present worth is -$115,678.9. Since the present worth of the cost is lower for Alternate B, select Alternate B. The present worth for Alternate B can be calculated using a spreadsheet as follows:

= - PV(13.3%,5,-19000,7000) - 48000

The above spreadsheet function gives the value of -$110,591.83.

Answer 13

(b):

To determine

Calculate the present worth with considering the inflation.

Answer 14

(b):

Expert Solution

Explanation of Solution

The real interest rate (if) can be calculated as follows:

if=i+f+i×f=0.1+0.03+0.1×0.03=0.13+0.003=0.133

The real interest rate is 13.3%.

The present worth (PW) for Alternative A can be calculated as follows:

PW=C+AM((1+if)n−1if(1+if)n)+SV(1(1+if)n)=−31,000−28,000((1+0.133)5−10.133(1+0.133)5)+5,000(1(1+0.133)5)=−31,000−28,000(3.4916)+5,000(0.5356)=−31,000−97,764.8+2,678=−126,086.8

The present worth is -$126,086.8. The present worth for Alternate A can be calculated using a spreadsheet as follows:

= - PV(13.3%,5,-28000,5000) - 31000

The above spreadsheet function gives the value of -$126,87.79.

The present worth (PW) for Alternative B can be calculated as follows:

PW=C+AM((1+if)n−1if(1+if)n)+SV(1(1+if)n)=−48,000−19,000((1+0.133)5−10.133(1+0.133)5)+7,000(1(1+0.133)5)=−48,000−19,000(3.4916)+7,000(0.5356)=−48,000−66,340.4+3,749.2=−110,591.2

The present worth is -$115,678.9. Since the present worth of the cost is lower for Alternate B, select Alternate B. The present worth for Alternate B can be calculated using a spreadsheet as follows:

= - PV(13.3%,5,-19000,7000) - 48000

The above spreadsheet function gives the value of -$110,591.83.

Answer 15

(b):

Expert Solution

Answer 16

(b):

Expert Solution

Answer 17

Expert Solution

Answer 18

(c):

To determine

Calculate the interest rate that makes both the alternates equal.

(c):

Expert Solution

Explanation of Solution

The interest rate that makes both alternates’ present worth equal can be calculated using the spreadsheet as follows:

ENGR.ECONOMY CUSTOM FOR TAMU ISEN 667, Chapter 14, Problem 29P

Answer 19

(c):

To determine

Calculate the interest rate that makes both the alternates equal.

Answer 20

(c):

Expert Solution

Explanation of Solution

The interest rate that makes both alternates’ present worth equal can be calculated using the spreadsheet as follows:

ENGR.ECONOMY CUSTOM FOR TAMU ISEN 667, Chapter 14, Problem 29P

Answer 21

(c):

Expert Solution

Answer 22

(c):

Expert Solution

Answer 23

Expert Solution

Answer 24

Ch. 14 - Prob. 1P Ch. 14 - Prob. 2P Ch. 14 - Prob. 3P Ch. 14 - Prob. 4P Ch. 14 - Prob. 5P Ch. 14 - Prob. 6P Ch. 14 - Prob. 7P Ch. 14 - Prob. 8P Ch. 14 - Prob. 9P Ch. 14 - Prob. 10P

Calculate the present worth without considering the inflation.

Calculate the present worth without considering the inflation.

Explanation of Solution

Calculate the present worth with considering the inflation.

Explanation of Solution

Calculate the interest rate that makes both the alternates equal.

Explanation of Solution

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