Calculate the Annual worth.

Question

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Answer 1

Question

Chapter 9, Problem 1P

To determine

Calculate the Annual worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The annual worth (AW) of defender can be calculated as follows.

AWDefender=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−400(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.510)=−6,296

Annual worth of defender is -$6,296.

The annual worth (AW) of challenger can be calculated as follows.

AWChallenger=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−8,000(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.530)=−4,345

Annual worth of challenger is -$4,345. Since the annual worth of the challenger is greater, replace immediately.

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Answer 2

Question

Chapter 9, Problem 1P

To determine

Calculate the Annual worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The annual worth (AW) of defender can be calculated as follows.

AWDefender=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−400(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.510)=−6,296

Annual worth of defender is -$6,296.

The annual worth (AW) of challenger can be calculated as follows.

AWChallenger=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−8,000(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.530)=−4,345

Annual worth of challenger is -$4,345. Since the annual worth of the challenger is greater, replace immediately.

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Answer 3

Question

Chapter 9, Problem 1P

To determine

Calculate the Annual worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The annual worth (AW) of defender can be calculated as follows.

AWDefender=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−400(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.510)=−6,296

Annual worth of defender is -$6,296.

The annual worth (AW) of challenger can be calculated as follows.

AWChallenger=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−8,000(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.530)=−4,345

Annual worth of challenger is -$4,345. Since the annual worth of the challenger is greater, replace immediately.

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Answer 4

Question

Chapter 9, Problem 1P

To determine

Calculate the Annual worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The annual worth (AW) of defender can be calculated as follows.

AWDefender=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−400(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.510)=−6,296

Annual worth of defender is -$6,296.

The annual worth (AW) of challenger can be calculated as follows.

AWChallenger=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−8,000(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.530)=−4,345

Annual worth of challenger is -$4,345. Since the annual worth of the challenger is greater, replace immediately.

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Answer 5

Chapter 9, Problem 1P

To determine

Calculate the Annual worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The annual worth (AW) of defender can be calculated as follows.

AWDefender=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−400(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.510)=−6,296

Annual worth of defender is -$6,296.

The annual worth (AW) of challenger can be calculated as follows.

AWChallenger=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−8,000(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.530)=−4,345

Annual worth of challenger is -$4,345. Since the annual worth of the challenger is greater, replace immediately.

Answer 6

Chapter 9, Problem 1P

To determine

Calculate the Annual worth.

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The annual worth (AW) of defender can be calculated as follows.

AWDefender=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−400(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.510)=−6,296

Annual worth of defender is -$6,296.

The annual worth (AW) of challenger can be calculated as follows.

AWChallenger=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−8,000(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.530)=−4,345

Annual worth of challenger is -$4,345. Since the annual worth of the challenger is greater, replace immediately.

Answer 7

Chapter 9, Problem 1P

To determine

Calculate the Annual worth.

Answer 8

Expert Solution & Answer

Explanation of Solution

Time period is denoted by n and the interest is denoted by i. The annual worth (AW) of defender can be calculated as follows.

AWDefender=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−400(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.510)=−6,296

Annual worth of defender is -$6,296.

The annual worth (AW) of challenger can be calculated as follows.

AWChallenger=−Investment(i(1+i)n(1+i)n−1)−Costmaiintenance−(Total miles×Cost per galonMileage)=−8,000(0.15(1+0.15)2(1+0.15)2−1)−8000−(15,000×3.530)=−4,345

Annual worth of challenger is -$4,345. Since the annual worth of the challenger is greater, replace immediately.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Ch. 9 - Prob. 1P Ch. 9 - Prob. 2P Ch. 9 - Prob. 3P Ch. 9 - Prob. 4P Ch. 9 - Prob. 5P Ch. 9 - Prob. 6P Ch. 9 - Prob. 7P Ch. 9 - A city water and waste-water department has a...Ch. 9 - Prob. 9P Ch. 9 - Prob. 10P

Calculate the Annual worth.

Calculate the Annual worth.

Explanation of Solution

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Chapter 9 Solutions