Question

If Machine A has a NPW of $29,282 and Machine B has a NPW of $40,847...

If Machine A has a NPW of $29,282 and Machine B has a NPW of $40,847 over an 8-year period, what is the difference in the annual worth of Machine B over Machine A at a rate of 2% p. y. c. y?

$1,304

$592

$804

$1,579

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Homework Answers

Answer #1

$1,579

Annual worth of Machine A = pmt(rate,nper,pv,fv) Where,
= $ 3,997 rate = 2%
nper = 8
pv = $ -29,282
fv = 0
Annual worth of Machine A = pmt(rate,nper,pv,fv) Where,
= $ 5,576 rate = 2%
nper = 8
pv = $ -40,847
fv = 0
Difference in Annual worth = $       5,576 - $       3,997
= $       1,579
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