You have purchased a machine costing $34,000. The machine will be used for two y
ID: 2562809 • Letter: Y
Question
You have purchased a machine costing $34,000. The machine will be used for two years, and at the end of this time, its salvage value is expected to be $14,000. The machine will be used 8,000 hours during the first year and 9,000 hours during the second year. The expected annual net savings will be $35,000 during the first year and $37,000 during the second year. If your interest rate is 10%, what would be the equivalent net savings per machine hour? Click the icon to view the interest factors for discrete compounding when i= 10% per year The equivalent net savings are Sper machine hour. (Round to the nearest cent) More Info ingle Payment ies Compound Amount Factor Present Worth Factor Compound Sinking Amount Factor Present Worth Factor Capital Recovery Factor Factor (FIP, i, N) (P/F, i, N) (FIA, i, N) (A/F, i, N) (P/A, i, N) (A/P, i, N) 1.1000 1.2100 1.3310 1.4641 1.6105 0.9091 0.8264 0.7513 0.6830 0.6209 1.0000 2.1000 3.3100 4.6410 6.1051 1.0000 0.4762 0.3021 0.2155 0.1638 0.9091 1.7355 2.4869 3.1699 3.7908 1.1000 0.5762 0.4021 0.3155 0.2638 4 1.7716 1.9487 2.1436 2.3579 2.5937 0.5645 0.5132 0.4665 0.4241 0.3855 7.7156 9.4872 11.4359 13.5795 15.9374 0.1296 0.1054 0.0874 0.0736 0.0627 4.3553 4.8684 5.3349 5.7590 6.1446 0.2296 0.2054 0.1874 0.1736 0.1627 10 PrintDoneExplanation / Answer
Initial Investment 34,000 Salvage value after two years 14,000 Present worth factor 0.8264 11,570 Usage cost for the two years 22,430 First year Second Year No of Hours used 8,000 9,000 Expected Net Savings per year 35,000 37,000 Present value factor 0.91 0.83 31,819 30,577 Machine Usage cost 11,215 11,215 Actual Savings 20,603 19,362 Per Hour Savings 2.58 2.15
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