Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribed
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=3

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Human Resources In The Urban Economy

Authors: Mark Perlman

1st Edition

1317332474, 9781317332473

More Books

Students also viewed these Economics questions