Question: Using an excel spreadsheet showcase the following A certain machine costs $25 000 to purchase and install. It has salvage values and operating costs as

Using an excel spreadsheet showcase the following

A certain machine costs $25 000 to purchase and install. It has salvage values and operating costs as shown in the table below. The salvage value at time 0 reflects the loss of the installation costs at the time of installation. The MARR is 12%.

Using an excel spreadsheet showcase the following A certain machine costs $25

Costs and Salvage Values for Various Lives Life in Years Salvage Value Operating Cost 0 S20 000.00 1 16 000.00 $ 3000.00 2 12 800.00 3225.00 3 10 240.00 3466.88 + 8192.00 3726.89 5 6553.60 4006.41 6 5242.88 4306.89 7 4194.30 4629.90 8 3355.44 4977.15 9 2684.35 5350.43 10 2147.48 5751.72 11 1717.99 6183.09 12 1374.39 6646.83 13 1099.51 7145.34 14 879.61 7681.24 15 703.69 8257.33 16 562.95 8876.63 17 450.36 9542.38 18 360.29 10 258.06 a) What is the economic life of the machine? b) What is the equivalent annual cost over that life? Now assume the MARR is 5%. c) What is the economic life of the machine? d) What is the equivalent annual cost over that life? e) Explain the effect of decreasing the MARR

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