You are considering investing in a new business which requires an initial investment of $250,000 in...

 

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You are considering investing in a new business which requires an initial investment of $250,000 in a waste disposal truck. The truck requires an annual O&M costs of $10,500. The truck will yield an annual revenue of $8,500 in the first year, then increase by $500 each year. The garbage truck has a trash compactor that costs $3,500 which has to be replaced in the 6th year of service. The truck's service life is 12 years, and after which it can be sold for $140,000. The MARR for this project is 12%. Use a PW analysis to determine if this investment should be made. Which equation correctly calculates the Net present worth of the investment? You are considering investing in a new business which requires an initial investment of $250,000 in a waste disposal truck. The truck requires an annual O&M costs of $10,500. The truck will yield an annual revenue of $8,500 in the first year, then increase by $500 each year. The garbage truck has a trash compactor that costs $3,500 which has to be replaced in the 6th year of service. The truck's service life is 12 years, and after which it can be sold for $140,000. The MARR for this project is 12%. Use a PW analysis to determine if this investment should be made. Which equation correctly calculates the Net present worth of the investment?

Answer rating: 100% (QA)

Net Present Worth NPW Equation for the Investment The correct equation to calculate the Net Present ... View the full answer