Question

An engineer uses an economic analysis to determine if is worth to purchase the machine. The...

An engineer uses an economic analysis to determine if is worth to purchase the machine. The rate of return is 6%. What is the future worth of the machine?
Initial cost = 9000
Estimated life 8years
Salvage value 900
Annual maintainable cost 450
Annual maintainable income 2450
Income gradient 100

Homework Answers

Answer #1

Future worth = -9000(F/P, 6%, 8) - 450(F/A, 6%, 8) + [2450 + 100(A/G, 6%, 8)] (F/A, 6%, 8) + 900

                     = -9000(1.594) - 450(9.897) + [2450 + 100(3.195)] (9.897) + 900

                     = -14,346 - 4,453.65 + 27,409.74 + 900

                     = $9,510.1

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