The table below shows present worth calculations of the costs associated with using a presently owned machine
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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 5year 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 149 000 PW D for 1 year C for 4 years 36 000 113 000 P F 10 1 36 000 113 000 0 90...View the full answer
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