Question: B. Problems and Questions Farmer Jones is pondering the replacement of one of his aging tractors. The key parameters of the three tractors under scrutiny
B. Problems and Questions Farmer Jones is pondering the replacement of one of his aging tractors. The key parameters of the three tractors under scrutiny are provided below. ParametersAlpha 1. Initial Cost BetaGamma 540,000 435,000 EOY1 1% annually 495,000 250,000 at 355,00 EOY1 to EOY4 $240,000 at EOY1 2. Revenues increasing by 345,000 EOYs to increasing by 1,500 annually thereafter EOY8 thereafter 105,000 at 3. O 241,000 at EOY1 peratingincreasing by increasing by costs $175,000 annually 2,500 annually ereafte $3,500 annually thereafter 4. End-of-life salvage value ($) 5. Useful life 10,000 -10,000 -5,000 8 16 4 EOYEnd-of-year Industry Standard 3 years MARR-10% (years) . 1. Alpha's Net Present Worth (NPW) (rounded to the nearest $100) of 2. Beta's NPW (rounded to the nearest $100) is 3. Gamma's Net Future Worth (NFW) (rounded to the nearest $100) after 5 a) $29,200; b) $31,500; c) $36,100; d) $38,700. a) $30,800; b) $32,300; c) $34,400; d) $37,100. years is a) $125,900; b) $133,600; c) $149,700; d) $154,800. Alpha's Annual Equivalent Worth (AEW) (rounded to the nearest $100) is a) $8,900; b) $9,100; c) $9,300; d) $9,900. 4
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