t id 87843. 18course Q Search o a htt jsp?cou QUESTION 1 A tractor costs $50,000

Question

t id 87843. 18course Q Search o a htt jsp?cou QUESTION 1 A tractor costs $50,000 and has an expected life of ten years. The savage value is estimated to be $2000, M&0 costs are $1000 per year, and revenues are $10,000 per year. MARR-8%, The PV of the tractor is most nearly: O a. $10.400 O b S11.300 O c.$18,000 O e $17.500 QUESTION 2 to ne ontvoer after that pont lfhSMRRis8%, how much money wil he need to have toreteen 30 years He would like to have si 30 years from today to live out his retirement goal? The amount is most nearly o a $1.26M ? b. S250M O c $10.1M o d $11 3M to save all to save and

Explanation / Answer

Question 1

Cost of tractor = $50,000

Salvage value = $2,000

M&O cost = $1,000 per year

Revenue = $10,000 per year

MARR = 8%

Time Period = 10 years

Calculate the Present Worth -

PW = -Cost of tractor - M&O costs(P/A, i, n) + Revenues(P/A, i, n) + Salvage value(P/F, i, n)

PW = -$50,000 - $1,000(P/A, 8%, 10) + $10,000(P/A, 8%, 10) + $2,000(P/F, 8%, 10)

PW = -$50,000 - ($1,000 * 6.7101) + ($10,000 * 6.7101) + ($2,000 * 0.4632)

PW = -$50,000 - $6,710.1 + $67,101 + $926.4

PW = $11,317.30

So,

The PW of the tractor is most nearly $11,300.

Hence, the correct answer is the option (b).

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