Ex.1 - Two Pumps are being considered for purchase.If interest is 8% and their maintenance cost are the same.

Pump A (Initial Cost 8000, Salvage Value end of use life 1800, Useful time in year 12)

Pump B (Initial Cost 6000, Salvage Value end of use life 2000, Useful time in year 6)

Which pump should be bought?

a) Pump A

b) Pump B

From Exercise Ex.1.Which is the Present Value for Pump A?

a) -7,390.87

b) -$6998.09

c) -$7,285.20

d) -8087,36

From Exercise Ex.1.Which is the Present Value for Pump B?

a) -$7,280.67

b) -$7,746.25

c) -$6,989.70

d) -$7,968.09