problem 5-8 please show work and no messy hand writing 5. Calculate the present

Question

problem 5-8
please show work and no messy hand writing

5. Calculate the present worth of all costs for a newly acquired machine with an initial cost of $40,000, no trade-in value, a life of 13 years, and an annual operating cost of $15,000 for the first 4 years, increasing by 10% per year thereafter, use an interest rate of 10% per year. The present worth of all costs for a newly acquired machine is determined to be $ 6. For the cash flows shown in the diagram, determine the value of x and 2x that will make the future worth in year 10 equal to $100,000.

Explanation / Answer

Expected Year Revenue PVF @ 14% Present Value 1 154000 0.877193 135087.7 2 154000 0.769468 118498 3 154000 0.674972 103945.6 4 260000 0.59208 153940.9 5 260000 0.519369 135035.9 6 260000 0.455587 118452.5 7 260000 0.399637 103905.7 8 260000 0.350559 91145.35 Present Worth of Revenues 960012

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