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Kiwidale Dairy is considering purchasing a new ice-cream maker. Two models, Smoothie and Creamy, are available and their information is given below (all costs and
Kiwidale Dairy is considering purchasing a new ice-cream maker. Two models, Smoothie and Creamy, are available and their information is given below (all costs and profits are in dollars):
Smoothie | Creamy | |
First Cost | $20000 | $34000 |
Service Life | 14 years | 12 years |
Annual Profit | $4500 | $9000 |
Annual Operating Cost | $950 | $3250 |
Salvage Value | $2000 | $4500 |
Calculate the present worth of the smoothie machine for one life cycle (no repeated lives), if the interest rate is 10%.
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