The table below shows present worth calculations of the costs associated with using a presently owned machine
Question:
The table below shows present worth calculations of the costs associated with using a presently owned machine (defender) and a possible replacement (challenger) for different numbers of years. Determine when the defender should be replaced using an interest rate of 10% per year and a 5-year study period. Show solutions
(a) By hand
(b) Byspreadsheet.
Transcribed Image Text:
PW If Kept/Used Stated Number of Years, $ Number of Years Kept/Used Defender -36,000 -75,000 一125.000 - 166,000 -217,000 Challenger -89,000 -96,000 -102,000 -113,000 -149,000
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a PW C for 5 years 149000 PW D for 1 year C for 4 years 36000 113000PF101 36000 11300009091 138728 P...View the full answer
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