7. 4.31 Compare the following machines on the basis of their present worth values. Use i = 12% per year.

(a) Make the computations using factors.

(b) (Spreadsheet exercise) Develop the single-cell functions that display the PW values for the New and Used alternatives.

Table Summary: Table divided into 3 columns with the headings marked from left to right as:

Machine; New; and Used.

Machine New Used First cost, $ −44, 000 −23, 000 Annual operating cost, $ −7, 000 −9, 000 Annual repair cost, $ −210 −350 Overhaul after 10 years, $ −1, 900 —

Salvage value, $ 4,000 3,000 Life, years 14 7