Machine A which is a basic model costs $25,000 and lasts 5 years. At the end of

Question

Machine A which is a basic model costs $25,000 and lasts 5 years. At the end of the 5 years it has a salvage value of $1,500 and its market value at the end of 3 years is $7,000. An enhanced model, Machine B sells for $36,000 and has a life of 8 years with a salvage value of $8,500. The benefit that these two machines are anticipated to provide is $9,500 per year, indefinitely. Looking at an 8-year window with a rate of 2% APR compounded yearly, what is the difference between the net present worth of Machine B over Machine A? (Hint: the second copy of Machine A can be sold at the end of the 8th year for the price that it will command after a 3-year life.)

Explanation / Answer

i am getting around 8430 dollars , is there any such option ?

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.