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CONSIDER THE PURCHASE OF TWO COMPUTER-AIDED - DESIGN (CAD) SYSTEMS. ASSUME THE ANNUAL INTEREST RATE IS 13%. Initial Cost 100 000 65 000 Maintenance &
CONSIDER THE PURCHASE OF TWO COMPUTER-AIDED - DESIGN (CAD) SYSTEMS. ASSUME THE ANNUAL INTEREST RATE IS 13%. Initial Cost 100 000 65 000 Maintenance & Operating Cost 4 000/year 8 000/year Salvage 18 000 after 5 years 5 000 after 5 years. System 1 System 2 Initial Cost Maintenance & Operating Cost Salvage 100 000 4000/year 18 000 after 5 years 65000 8 000/year 5000 after 5 years Question 1) Draw Cash Flow Diagram Question 2) Determine the transaction in Present worth value Question 3) Determine the transaction in Future worth value Question 4) Determine the transaction in Annual worth value Question 5) Which system would you select and why
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