If the company decided to sell the machine after the first 3 years, what would the FW value have to be, for AW to be the same as it is for 12 years life * ?cycle S = 40 % of p i=8% per year i 4 5 9 io ii i2 year AOC = $ 9,000 6 AMC = $ 2,000 P = $ 20,000 = AW12 + 20,000 (A/P, 8%, 3) + 9,000 / (A/F, 8%, 3) = [ 20,000 (A/P, 8%, 3) + 9,000 ] * (F/A, 8%, 3) = AW12 + [20,000 (A/P, 8%, 3) + 9,000 ]/ (A/F, 40%, 3) = [ AW12 + 20,000 (A/P, 40%, 3) + 9,000 ] / (A/F, 40%,3) =Pt in the following cash flow S-40% of P 18% per year io 11 12 AOC - $ 9,000 AMC - $2,000 P-$20,000 O --20,000+8000(P/F, i, 12)-2,000[(P/F, 1, 4)+ (P/F, 1, 8)+(P/F, 1, 12)]-9,000(P/A, I, 12) = -20,000+8000(P/F, I, 12)-2,000[(P/F, 1, 4)+ (P/F, 1, 8)]-9,000(P/A, I, 12) = -AMC-AOC - [20,000 (A/P, 8%, 3) +9,000/ (A/F, 40%, 3) --20,000-8000(P/F, i, 12)-2,000[(P/F, 1, 4)- (P/F, 1,8)+(P/F, 1, 12)3-9,000(P/A, i, 12) An 88200 investment returned S2000 per year over a 5-year . try (6%, 8%) to calculate rate of retum 7.3% 7% 6.85% 7.6% 6.3%