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calculate the present worth (PW) of plan 1, 2,3, 4 and state which plan is the best econmical option The table below shows present worth

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calculate the present worth (PW) of plan 1, 2,3, 4 and state which plan is the best econmical option

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. Assume an interest rate of 10% per year and a 5-year study period. Four possibilities are under consideration Plan 1: Use the defender for 1 year and the challenger for 4 years. Plan 2: Use the defender for 2 years and the challenger for 3 years. Plan 3: Use the defender for 3 years and the challenger for 2 years Plan 4: Use the defender for 4 years and the challenger for 1 year. PW If Kept/Used Stated Number of Years, Number of Years Kept/Used Defender Challenger 36,000 89,000 96,000 75,000 125,000 102,000 166,000 113,000 217,000 149,000

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