Get help from the best in academic writing.

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

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 perMachine 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 5% 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.)
Introduction A=P(1 r)^n Explanation On the basic structute the mo…View the full answer

error: Content is protected !!