OF YOUR WORK TO OBTAIN PARTIAL CREDT For problems using compound the nearest % i
ID: 1116955 • Letter: O
Question
OF YOUR WORK TO OBTAIN PARTIAL CREDT For problems using compound the nearest % in the table st factor tables to estimate interest rate, round to 2. Two pieces of equipment are being considered for which piece of equipment should be purchased? Use Annual Cash Flow Analysis to solve: purchase. If interest is 10%, PW Cost EUAB Salvage Value Useful Life $ 6,000 $ 1,000 $ 1,200 12 yr $4,500 $1,000 700 3 yr EUAWA EUAWB Best Alter 3. The following information is known: Cost Useful Life Salvage Value $ 1,500 s 5 yr. 300 a. Calculate the straight line depreciation for each year of the asset's useful life. b. What is the SOYD Depreciation for the same asset each of the years of the asset's useful life? c. What is the DDB Depreciation for the same asset each of the years of the asset's useful life? SOYD DDB Yr. S.LExplanation / Answer
(2)
EUAWA ($) = - 6,000 x A/P(10%, 12) + 1,000 + 1,200 x P/F(10%, 12) x A/P(10%, 12)
= - 6,000 x 0.1468** + 1,000 + 1,200 x 0.3186** x 0.1468 = - 880.8 + 1,000 + 56.12
= 175.32
EUAWB ($) = - 4,500 x A/P(10%, 3) + 1,000 + 700 x P/F(10%, 3) x A/P(10%, 3)
= - 4,500 x 0.4021** + 1,000 + 700 x 0.7513** x 0.4021 = - 1,809.45 + 1,000 + 211.47
= - 597.98
Since Alternative A has a positive EUAW, this should be selected.
NOTE: As per Chegg answerring guidelines, first question is answered.
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