Calculate the present worth.

Question

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Answer 1

Question

Chapter 9, Problem 1P

To determine

Calculate the present worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The present worth (PW) of defender (Old boat) can be calculated as follows.

PWDefender=MV+Expense((1+i)n−1i(1+i)n)+Total mile×Mileage×CostFuel−MVEnd of the life(1+i)n=3,000+400((1+0.15)2−10.15(1+0.15)2)+200×2×5−500(1+0.15)2=4,085

Annual worth of defender is $4,085.

The present worth (PW) of challenger (New boat) can be calculated as follows.

PWDefender=Investment+Expense((1+i)n−1i(1+i)n)+Total mile×Mileage×CostFuel−MVEnd of the life(1+i)n=10,000+200×10×5−7,000(1+0.15)2=4,870

Present worth is $4,870. Since the present worth of the cost is less for the defender, retain the defender one more year.

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Answer 2

Question

Chapter 9, Problem 1P

To determine

Calculate the present worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The present worth (PW) of defender (Old boat) can be calculated as follows.

PWDefender=MV+Expense((1+i)n−1i(1+i)n)+Total mile×Mileage×CostFuel−MVEnd of the life(1+i)n=3,000+400((1+0.15)2−10.15(1+0.15)2)+200×2×5−500(1+0.15)2=4,085

Annual worth of defender is $4,085.

The present worth (PW) of challenger (New boat) can be calculated as follows.

PWDefender=Investment+Expense((1+i)n−1i(1+i)n)+Total mile×Mileage×CostFuel−MVEnd of the life(1+i)n=10,000+200×10×5−7,000(1+0.15)2=4,870

Present worth is $4,870. Since the present worth of the cost is less for the defender, retain the defender one more year.

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Answer 3

Question

Chapter 9, Problem 1P

To determine

Calculate the present worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The present worth (PW) of defender (Old boat) can be calculated as follows.

PWDefender=MV+Expense((1+i)n−1i(1+i)n)+Total mile×Mileage×CostFuel−MVEnd of the life(1+i)n=3,000+400((1+0.15)2−10.15(1+0.15)2)+200×2×5−500(1+0.15)2=4,085

Annual worth of defender is $4,085.

The present worth (PW) of challenger (New boat) can be calculated as follows.

PWDefender=Investment+Expense((1+i)n−1i(1+i)n)+Total mile×Mileage×CostFuel−MVEnd of the life(1+i)n=10,000+200×10×5−7,000(1+0.15)2=4,870

Present worth is $4,870. Since the present worth of the cost is less for the defender, retain the defender one more year.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

Chapter 9, Problem 1P

To determine

Calculate the present worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The present worth (PW) of defender (Old boat) can be calculated as follows.

PWDefender=MV+Expense((1+i)n−1i(1+i)n)+Total mile×Mileage×CostFuel−MVEnd of the life(1+i)n=3,000+400((1+0.15)2−10.15(1+0.15)2)+200×2×5−500(1+0.15)2=4,085

Annual worth of defender is $4,085.

The present worth (PW) of challenger (New boat) can be calculated as follows.

PWDefender=Investment+Expense((1+i)n−1i(1+i)n)+Total mile×Mileage×CostFuel−MVEnd of the life(1+i)n=10,000+200×10×5−7,000(1+0.15)2=4,870

Present worth is $4,870. Since the present worth of the cost is less for the defender, retain the defender one more year.

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Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 9, Problem 1P

To determine

Calculate the present worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The present worth (PW) of defender (Old boat) can be calculated as follows.

PWDefender=MV+Expense((1+i)n−1i(1+i)n)+Total mile×Mileage×CostFuel−MVEnd of the life(1+i)n=3,000+400((1+0.15)2−10.15(1+0.15)2)+200×2×5−500(1+0.15)2=4,085

Annual worth of defender is $4,085.

The present worth (PW) of challenger (New boat) can be calculated as follows.

PWDefender=Investment+Expense((1+i)n−1i(1+i)n)+Total mile×Mileage×CostFuel−MVEnd of the life(1+i)n=10,000+200×10×5−7,000(1+0.15)2=4,870

Present worth is $4,870. Since the present worth of the cost is less for the defender, retain the defender one more year.

Answer 6

Chapter 9, Problem 1P

To determine

Calculate the present worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The present worth (PW) of defender (Old boat) can be calculated as follows.

PWDefender=MV+Expense((1+i)n−1i(1+i)n)+Total mile×Mileage×CostFuel−MVEnd of the life(1+i)n=3,000+400((1+0.15)2−10.15(1+0.15)2)+200×2×5−500(1+0.15)2=4,085

Annual worth of defender is $4,085.

The present worth (PW) of challenger (New boat) can be calculated as follows.

PWDefender=Investment+Expense((1+i)n−1i(1+i)n)+Total mile×Mileage×CostFuel−MVEnd of the life(1+i)n=10,000+200×10×5−7,000(1+0.15)2=4,870

Present worth is $4,870. Since the present worth of the cost is less for the defender, retain the defender one more year.

Answer 7

Chapter 9, Problem 1P

To determine

Calculate the present worth.

Answer 8

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The present worth (PW) of defender (Old boat) can be calculated as follows.

PWDefender=MV+Expense((1+i)n−1i(1+i)n)+Total mile×Mileage×CostFuel−MVEnd of the life(1+i)n=3,000+400((1+0.15)2−10.15(1+0.15)2)+200×2×5−500(1+0.15)2=4,085