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Calculate the present worth of all costs for a newly acquired machine with an initial cost...

Calculate the present worth of all costs for a newly acquired machine with an initial cost of $36,000, no trade-in value, a life of 15 years, and an annual operating cost of $16,000 for the first 5 years, increasing by 10% per year thereafter. Use an interest rate of 10% per year.

The present worth of all costs for a newly acquired machine is determined to be?

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Answer #1
YEAR PAYMENT PVF @10% PRESENT VALUE
0 36000 1.000 36000
1 16000 0.909 14545.45
2 16000 0.826 13223.14
3 16000 0.751 12021.04
4 16000 0.683 10928.22
5 16000 0.621 9934.741
6 17600 0.564 9934.741
7 19360 0.513 9934.741
8 21296 0.467 9934.741
9 23425.6 0.424 9934.741
10 25768.16 0.386 9934.741
11 28344.98 0.350 9934.741
12 31179.47 0.319 9934.741
13 34297.42 0.290 9934.741
14 37727.16 0.263 9934.741
15 41499.88 0.239 9934.741
Total present value of cost 196000
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