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7 find numerical results please 2. The costs and revenues of 2 alternatives for a machine are given below. Determine which alternative is economically viable
7
find numerical results please
2. The costs and revenues of 2 alternatives for a machine are given below. Determine which alternative is economically viable using the present value method when 20.56% annual discount rate compounded 4-month maturity. (50 POINTS) Parameters 1. Machine 2. Machine Initial investment cost 300,000* (1+ID/10) TL 300,000* (1+2*ID/10) TL Salvage cost (based on initial investment cost) 25% 20% Annual Operating Cost For The First Year 15,000*(1+3*ID/10) TL 15,000* (1+8*ID/10) TL Annual increase rate of operating cost 18% 22% First Year Income 100,000*(2+ID/10) TL 100,000* (3+3*ID/10) TL Annual decrease rate or amount of Income 5,000 TL 1.5% Economic life 10 years 16 years NOTE: ID=3Step by Step Solution
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