Question: please answer with formula Merry Industries is considering a new piece of equipment for a project lasting 10 years with details as shown below. The
please answer with formula

Merry Industries is considering a new piece of equipment for a project lasting 10 years with details as shown below. The costs and benefits are expected to keep increasing with the inflation rate even when a new machine is put into operation. Taking these into account, what is the annual worth that the company can expect from the machine? Initial cost $95,000 MARR 14% Inflation rate 3% Life 7 years Project life 10 years Machine value today with life of 3 years $34,500 $23,500 Machine value today with life of 7 years First year costs $12,200 First year benefits $36,800 A. $3,260 B. $3,969 C. $4,779 D. $5,673 Merry Industries is considering a new piece of equipment for a project lasting 10 years with details as shown below. The costs and benefits are expected to keep increasing with the inflation rate even when a new machine is put into operation. Taking these into account, what is the annual worth that the company can expect from the machine? Initial cost $95,000 MARR 14% Inflation rate 3% Life 7 years Project life 10 years Machine value today with life of 3 years $34,500 $23,500 Machine value today with life of 7 years First year costs $12,200 First year benefits $36,800 A. $3,260 B. $3,969 C. $4,779 D. $5,673
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
