Variable Dual Speed Speed First cost, S -250,000 -224,000 Annual operating cost, $/year -231,000 -235,000 Overhaul in year 3, $ -80,000 Overhaul in year 5, $ -50,000 Salvage value, $ 50,000 10,000 Life, years 6 6 (Source: Blank and Tarquin) (Overhaul is a maintenance or repair. It is a one time expense in that specific year) Based on the data provided the present worth of Variable-Speed is closest to: (All the alternatives presented below were calculated using compound interest factor tables including all decimal places) PWvar -$916,366 PWvar -$1,383,051 PWvar -$1,212,533 PWvar-$1,317,747 A company that manufactures amplified pressure transducers is trying to decide between the machines shown below. Compare them on the basis of their present worth values, using an interest rate of 7% per year. Variable Dual Speed Speed First cost, $ -250,000 -224,000 Annual operating cost, $/year -231,000 -235,000 Overhaul in year 3, $ -80,000 Overhaul in year 5, $ -50,000 Salvage value, $ 50,000 10,000 Life, years 6 6 (Source: Blank and Tarquin) (Overhaul is a maintenance or repair. It is a one time expense in that specific year). Based on the data provided the correct equation to calculate the present worth of Variable-Speed is: PWvar -250,000-231,000 (P/A,7%,6)-50,000 (P/F,7%,5)+ 50,000 (P/F,7%,6) PWvar --250,000 231,000 (P/A,7%,6) - 80,000 (P/F,7%,3) + 50,000(P/F,7%,6) PWvar -250,000-231,000(P/A,7%,6) + 50,000 (P/F,7%,6) PWvar -250,000-231,000(A/P,7%,6)-80,000 (F/P,7%,3) + 50,000(F/P,7%,6)