9.2- Two machines are being considered to do a certain task. Machine A cost $24,000 new and...
Question:
9.2- Two machines are being considered to do a certain task. Machine A cost $24,000 new and $2,600 to operate and maintain each year. Machine B cost $32,000 new and $1,200 to operate and maintain each year. Assume that both will be worthless after eight years and the interest rate is 5.0%. Determine by the equivalent uniform annual cost method which alternative is the better buy.
9.4- Assume you needed $10,000 on April 1, 2016, and two options were available:
a) Your banker would lend you the money at an annual interest rate of &.0 percent, compounded monthly, to be repaid on September 1, 2016.
b) You could cash in a certificate of deposit (CD) that was purchased earlier. The cost of the CD purchased on September 1, 2015, was $10,000. If you left in the savings and loan company until September 1, 2016, the CD's annual interest is 3.8% compounded monthly. If the CD is cashed before September 1, 2016, you lose all interest for the first three months and the interest rate is reduced to 1.9 percent, compounded monthly, after the first three months.