Question: Problems 37 through 42 are based on the following information: Your company has asked you to recommend collected the following data a new machine. After
Problems 37 through 42 are based on the following information: Your company has asked you to recommend collected the following data a new machine. After months of hard research, you have Data Alternative A Alternative B Initial Cost Annual Benefit Gradient Benefit (0 first year, G second year, 2G hird year..etc.) $202,000 73,000 1,200 $285,000 0088,000 1,300 34,000 Cost Gradient Maintenance&Operating Cost (0 first 18,000 600 1,100 Salvage Value Life, Years 48,000 Discussions with the accounting department reveal that a loan must be secured to purchase any machine. The loan data to cover the initial cost are as follows: Data Down Payment % of Initial Cost at Year 0) Loan Period, Years Annual Loan Payment 30 30% 34,392.11 537.441.93 The loan payments will be made annually with 12% interest. Your company assumes a MARR equal to 15%. Answer the following questions: 37. The analysis period you should use is: a. 24 years b. 21 years c. 12 years d. 18 years 38. The rate that you are going to use in comparing the alternatives is a.12% b. 15% c.3096 d. 13% 39. The equivalent uniform annual worth of the benefits for Alternative A over its useful life is: a. $73,000 b. $79,101 c. $75,516 d. $71,901
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