Two alternative replacement machines are being consided to replace a current one. Machine A has a first cost of $75,200 and its salvage value at the end of six years of estimated service life is $21,000. The operating costs of this machine are estimated to be $6,800 per year. Machine B has a first cost of $44,000, and its salvage value at the end of six years' service is estimated to be negligible. The annual operating costs will be $11,500. Compare these two using a present worth criteria at i = 13%.
 

 

Consider the sets of investment projects from the table below. Compute the equivalent annual worth of each project at I =10%, and determine the acceptability of each project

 

 

n

A

B

C

D

0

-$1500

-$3,500

-$6,000

-$15,000

1

400

3,000

-3,000

2,000

2

500

2,000

6,000

4,000

3

600

1,000

2,000

6,000

4

700

500

4,000

8,000

5

800

500

2,000

10,000

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