The purchase of a new piece of electronic measuring equipment for use in a continuous?metal-forming process is being considered. If this equipment were?purchased, the capital cost would be ?$337,000?, and the estimated savings are ?$241,000 per year. The useful life of the equipment in this application is uncertain. The estimated probabilities of different useful lives occurring are shown in the following table. Assume that MARR=15?% per year before taxes and the market value at the end of its useful life is equal to zero.

The purchase of a new piece of electronic measuring equipment for use in a continuous metal-fonning process is being considered. lfthis equipment were purchased, the capital cost would be $337,000, and the estimated savings are $241,000 per year. The useful life of the equipment in this application is uncertain. The estimated probabilities of different useful lives occurring are shown in the following table. Assume that MARR=15% per year before taxes and the market value at the end of its useful life is equal to zero. g Click the icon to View the estimated probabilities of different useful lives. a Click the icon to 1triew the interest and annuity table for discrete compounding when the MARR is 15% per year. a Click the icon to View a part of the table for areas under the normal curve. a. What are the ElPW},U(PW], and SDlPW} associated with the purchase of the equipment based on the beforetax analysis? EPW} =$|: [Round to the nearest dollar} VPW} = Cl :z'llIIEs [$]2 [Round to the nearest whole number} SD(PW] = ED {Round to the nearest dollar.) b. What is the probability that the PW is less than zero? Make a recommendation. Pr{PWS U}: D (Round to four decimal places} Is the purchase of equipment recommended? OYes ONo \fDiscrete Compounding; i = 15% Single Payment Uniform Series Compound Compound Sinking Capital Amount Present Amount Present Fund Recovery Factor Worth Factor Factor Worth Factor Factor Factor To Find F To Find P To Find F To Find P To Find A To Find A Given P Given F Given A Given A Given F Given P N FIP PIF FIA PIA AIF AIP 1.1500 0.8696 1.0000 0.8696 1.0000 1.1500 1.3225 0.7561 2.1500 1.6257 0.4651 0.6151 1.5209 0.6575 3.4725 2.2832 0.2880 0.4380 1.7490 0.5718 4.9934 2.8550 0.2003 0.3503 2.0114 0.4972 6.7424 3.3522 0.1483 0.2983 DO -OUR WN- 2.3131 0.4323 8.7537 3.7845 0.1142 0.2642 2.6600 0.3759 11.0668 4.1604 0.0904 0.2404 3.0590 0.3269 13.7268 4.4873 0.0729 0.2229 3.5179 0.2843 16.7858 4.7716 0.0596 0.2096 10 4.0456 0.2472 20.3037 5.0188 0.0493 0. 1993