Question: Kiwidale Dairy is considering purchasing a new ice-cream maker. Two models, Smoothie and Creamy, are available and their information is given below (all costs and

Kiwidale Dairy is considering purchasing a new ice-cream maker. Two models, Smoothie and Creamy, are available and their information is given below (all costs and profits are in dollars):

Smoothie

Creamy

First Cost

$20000

$34000

Service Life

14 years

12 years

Annual Profit

$4500

$9000

Annual Operating Cost

$950

$3250

Salvage Value

$2000

$4500

Calculate the present worth of the smoothie machine for one life cycle (no repeated lives), if the interest rate is 10%.

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