Question

  6. How much would I have in the bank at the end of 30 years if I put $500 a year into an account and the interest rate was 4%. Show all work.

7. Use Benefit cost ratio analysis to determine the best alternative. Each alternative has an 6 year useful life. Assume 15% MARR. Show all work.

A                     B                     C

First cost                                 $560                $340                $120

Annual Benefit                        $140                $100                $40

Salvage                                    $40                  $0                    $0

8. Kruber company located Tennessee is considering two different makes of a blow molding machine for one of its automotive products. The cost data for the two alternatives are provided in table below. MARR =12%. Using incremental analysis which Machine should they choose.

	Machine X	Machine Y
Initial cost	$150K	$275K
Annual operating cost	55K	60K
Benefits /Year	100K	120K
Salvage value	20K	40K
ROR	27%	17%
Life	10 Years

10. Using the information from question 9 create a depreciation schedule using straight line method.

Answer 1