Two alternative replacement machines are being consided to replace a current one.
Two alternative replacement machines are being consided to replace a current one. Machine A has a first cost of $75,200 and its salvage value at the end of six years of estimated service life is $21,000. The operating costs of this machine are estimated to be $6,800 per year. Machine B has a first cost of $44,000, and its salvage value at the end of six years’ service is estimated to be negligible. The annual operating costs will be $11,500. Compare these two using a present worth criteria at i = 13%. Â
Consider the sets of investment projects from the table below. Compute the equivalent annual worth of each project at I =10%, and determine the acceptability of each project
n
A
B
C
D
0
-$1500
-$3,500
-$6,000
-$15,000
1
400
3,000
-3,000
2,000
2
500
2,000
6,000
4,000
3
600
1,000
2,000
6,000
4
700
500
4,000
8,000
5
800
500
2,000
10,000
**Please place both answers in an excel spreadsheet**





