Your construction company needs to buy a new machine and has narrowed the selection down to two options. The first option costs $75,000. At the end of the seventh year, the salvage value of the first option is estimated to be $10,000. The second option costs $60,000. At the end of the seventh year, the salvage value of the second option is estimated to be $8,000. The annual profits are $20,000 per year for either option.

Using a MARR of 15% and a seven-year study period, calculate the present worth (PW) for the second option.

	A.	$3,007
	B.	$11,967
	C.	$26,215
	D.	$83,208

Your construction company needs to buy a new machine and has narrowed the selection down to two options. The first option costs $75,000. At the end of the seventh year, the salvage value of the first option is estimated to be $10,000. The second option costs $60,000. At the end of the seventh year, the salvage value of the second option is estimated to be $8,000. The annual profits are $20,000 per year for either option.

Using a MARR of 15% and a seven-year study period, which option should you select?

	A.	1st option
	B.	2nd option
	C.	Cannot compare

You need to purchase a new car and are considering three mutually exclusive options shown in the table below. Using a MARR of 15%, which option should be selected?

	A	B	C
Price	$110,000	$125,000	$138,000
Estimated useful life	10 years	10 years	10 years
Annual expenses	$53,800	$51,625	$45,033

	A.	Option A
	B.	Option B
	C.	Option C
	D.	Cannot compare