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How do i find the NPV and the PVA for this question? does everything else look correct? Thankyou! Canon Machines - 4 canon machines -
How do i find the NPV and the PVA for this question? does everything else look correct?
Thankyou!
Canon Machines - 4 canon machines - Expected to last 5 more years - Can each be sold immediately for $6,900 - Resale value in 5 years =0 - 4 operators paid $18.10/hr, working 40hr/wk52wk/yr - $1100/yr repair cost per machine - $1200/yr supply cost per machine Kodak Equipment - $275,000 for the equipment - Life of 5 years - Total disposal value after 5 years $19,000 - 2 operators, $22.70/hr,40hr/wk52wk/yr - Machine breakdown contract \$6120/yr - Cost of supplies for all machines combined =$5640/yr Discount rate: 5% Cost to keep Canon: Operator: $18.1040524=$150,592 Repair: $1,1004=$4,400 Supply: $12004=$4,800 Total cost /yr=$150,592+$4,400+$4,800=$159,792 PVA(yr1)=$159,792 NPV= Cost to buy Kodak/sell Canon: Equipment: $275,000 Operator: $22.7040522=$94,432 Repair: $6,120 Supply: $5640 Value in 5yr=$19,000 Sell canon: $6,8004=$27,200Step by Step Solution
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