Question
A firm is evaluating two machines. The first costs $250,000 and willrequire annual maintenance of $30,000 per year for 10 years. At the endof 10
A firm is evaluating two machines. The first costs $250,000 and willrequire annual maintenance of $30,000 per year for 10 years. At the endof 10 years, the salvage value will be $75,000. The second machine costs$400,000, and will require maintenance of $225,000 at the end of thefifth year. The salvage value after 10 years will be $175,000. Whichmachine should the firm select if interest is 8.5% compoundedannually?
could you help me with how I would arrange the equation for the first machine, the part where there is maintenance for 30000 every year for 10 years? wouldit be 30000/(1.085)^10 and 30000/ (1.085)^9.....and so on for the the 10 years or would it just be one consildated for 10 years
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