Question
Find the present worth of the moderate and extensive upgrading options Appledale Dairy is considering upgrading an old ice-cream maker. Upgrading is available at two
Find the present worth of the moderate and extensive upgrading options
Appledale Dairy is considering upgrading an old ice-cream maker. Upgrading is available at two levels: moderate and extensive. Moderate upgrading costs $6,300 now and yields annual savings of $3,400 in the first year, $3,200 in the second year, $3,000 in the third year, and so on. Extensive upgrading costs $11 ,550 and saves $7,900 in the first year. The savings then decrease by 20 percent each year thereafter. If the upgraded ice-cream maker will last for seven years, which upgrading option is better? Use a present worth comparison. Appledale's MARR is 8 percent. Click the icon to view the table of compound interest factors for discrete compounding periods when i = 8%. The present worth of the moderate upgrading option is $ and the present worth of the extensive upgrading option is $ . The V upgrading option is better. (Round to the nearest cent as needed.) extensive moderate
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