PLEASE find the AW value for machine A Please find the AW value for Machine B Pl
ID: 1107975 • Letter: P
Question
PLEASE find the AW value for machine A
Please find the AW value for Machine B
Please tell me which machine is better based on the AW values
Two alternative machines will produce the same product, but one is capable of higher-quality work, which can be expected to return greater revenue. The following are relevant data. Determine which is the better alternative, assuming repeatability and using SL depreciation, an income-tax rate of 41%, and an after-tax MARR of 12%. $19,000 14 years $4,000 $144,000 $137,000 529,000 Life Terminal BV (and MV) $1,000 S182.000 S179,000 Annual expenses Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. More Info Discrete Compounding: i-12% Single Payment Uniform Series Compound Capital Compound Amount Present Present Worth Factor To Find P Given A Sinking Fund Recovery Factor To Find F Given A Factor To Find A Given F Factor Worth Factor To Find F Given P To Find P Given F Factor To Find A Given P 1.1200 1.2544 1.4049 1.5735 1.7623 1.9738 2.2107 2.4760 2.7731 3.1058 3.4785 3.8960 4.3635 4.8871 5.4736 0.8929 0.7972 0.7118 0.6355 0.5674 0.5066 0.4523 0.4039 0.3608 0.3220 0.2875 0.2567 0.2292 0.2046 0.1827 0.8929 1.6901 2.4018 3.0373 3.6048 4.1114 4.5638 4.9676 5.3282 0.4717 0.2963 0.2092 0.1574 0.1232 0.0991 0.0813 0.0877 0.0570 0.0484 0.0414 0.0357 0.0309 0.0268 1.1200 0.5917 0.4163 0.3292 0.2774 0.2432 0.2191 0.2013 0.1877 0.1770 0.1684 0.1614 0.1557 0.1509 0.1468 2.1200 3.3744 4.7793 8.1152 10.0890 12.2997 14.7757 17.5487 20.6546 24.1331 28.0291 32.3926 37.2797 5.9377 6.1944 6.4235 6.6282 6.8109 14 PrintDoneExplanation / Answer
Machine A
Capital investment = $19,000
Life = 14 years
Salvage Value = $4,000
Annual receipts = $144,000
Annual expenses = $137,000
Calculate the annual worth of Machine A -
AW = -$19,000(A/P, 12%, 14) + $144,000 - $137,000 + $4,000(A/F, 12%, 14)
AW = (-$19,000 * 0.1509) + $144,000 - $137,000 + ($4,000 * 0.0309)
AW = -$2,867.1 + $144,000 - $137,000 + $123.6
AW = $4,256.5
The AW value of Machine A is $4,256.5
Machine B
Capital investment = $29,000
Life = 6 years
Salvage Value = $1,000
Annual receipts = $182,000
Annual expenses = $179,000
Calculate the annual worth of Machine B -
AW = -$29,000(A/P, 12%, 6) + $182,000 - $179,000 + $1,000(A/F, 12%, 6)
AW = (-$29,000 * 0.2432) + $182,000 - $179,000 + ($1,000 * 0.1232)
AW = -$7,052.8 + $182,000 - $179,000 + $123.2
AW = -$3,929.6
The AW of Machine B is -$3,929.6
The annual worth of Machine A is numerically higher.
Thus, Machine A is better alternative on basis of AW values.
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