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Montreal Construction needs to replace one of their heavy machines. They are considering buyi either Mach X or Mach Y, which have the following data
Montreal Construction needs to replace one of their heavy machines. They are considering buyi either Mach X or Mach Y, which have the following data Data Life, Years First Cost (FC Annual Benefit(AB) Mach X Mach Y $222,000 73,000 1,200 18,000 600 42,000 88,000 1300 AB Gradient (ABG Annual Maintenance &Operating Cost (M&O M&O Gradient (M&OG) Salvage Value 48,000 The Accounting Department of Montreal Construction reveals that a loan must be secured to purchase any machine. The loan data are as follows Data Down Payment (% of FC Mach X 25% Mach Y 25% ears Annual Loan Payment $33,208.75 S38,229.63 The loan payments will be made annually with 10% interest. Montreal Construction assumes MARR = 12%. Using the Net Present Worth (NPW) analysis, answer the following questions (53) The NPW for Mach Y, using only 6 years cash-flow, is close to a) $40,082 b) $45,5006 $41,088 d) S38,350 (54) he NPW for Mach Y, using the analysis period, is close to a) $75,286 b) $70,513 c) S74,255 d) S71,919
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