problem 6-08

answer the first one in red

Problem 6-08 Your answer is partially correct. Try again Riverbed Inc, a manufacturer of steel school lockers. plans to purchase a new punch press for use in its manufacturing process. After contacting the appropriate vendors, the purchasing department received differing terms and options from each vendor The Engineering Department has determined that each vendor's punch press in substantially identical and each has a useful life of 20 years. In addition, Engineering has estimated that required year-end maintenance costs will be $1,090 per year for the first 5 years $2,000 per year for the next 10 years, and $2,000 per year for the last 5 years. Following is each windor's sales package. Vendor A: 552,170 cash at time of delivery and 10 year-end payments of $10,870 each. Vendor A offers all its customers the right to purchase at the time of sale a separate 20-year maintenance service contract, under which Vendor A will perform all year end maintenance at a one-time initial cost of $10,520 Vendor 8: Forty semiannual payments at $9.440 each, with the first installment due upon delivery. Vendor 8 will perform all year end maintenance for the next 20 vears at no extra charge Vendor Pull cash price of $138.900 wil bede upon delivery. Asuming that both Vendors A and will be able to perform the required year-end maintenance, that Riverbed's cost of funds is 10%, and the machine will be purchased on January 1, compute the following The present value of the cash flows for vendor A. (Round factor aloes to decimal places 1.25126 and finaler to decimal places 53.581) 170045 The present value of the cash outlows for this option is The prsentialue of the cash flows for vendors (Rouletractor fors to decinal pres... 125126 and final answer to decimal places. 158.382.) The present value of the cash outflows for this option is 11/01 The present value of the cash flow for vender Ground Factor values to decimal places ... 2512 and final to decimal places 5581)