End of System System Year X Y 0 -$25,000 -$32,500 1 $11,000 $12,000 2 $11,000 $1
ID: 2507376 • Letter: E
Question
End of System System Year X Y 0 -$25,000 -$32,500 1 $11,000 $12,000 2 $11,000 $12,000 3 $11,000 $12,000 4 $11,000 $12,000 a) Calculate the net future worth of System X if the MARR is 12% b) Calculate the net future worth of System Y, if the MARR is 12% c) Which system is better? End of System System Year X Y 0 -$25,000 -$32,500 1 $11,000 $12,000 2 $11,000 $12,000 3 $11,000 $12,000 4 $11,000 $12,000 a) Calculate the net future worth of System X if the MARR is 12% b) Calculate the net future worth of System Y, if the MARR is 12% c) Which system is better?Explanation / Answer
a) Net future worth of System X if the MARR is 12% =
= -25000+11000*(1.12)^3+11000*(1.12)^2+11000*(1.12)+11000
=$27,572.608
=$27,572.61 (appx)
b)Net future worth of System Y if the MARR is 12% =
= -32500+12000*(1.12)^3+12000*(1.12)^2+12000*(1.12)+12000
=$24,851.94
c) As future worth of X is greater than future worth of Y, hence system X is better
ans:System X
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