Question

AD E PM windo He aeShe CComent Share le 13 psed 1029 Campabity Mode Soe Form Vew F evie e Show ons a y rgeQuick e Ouhe Set Convan Smank -1 A- r e e M C Pam Problem 10 One more break even problem Acme Corp is looking at buying a new road paving machine. The machine costs $3,000,000 and Acme wants to look at break even cost over a 4 year period of time. The machine paves roads for $275.00 per mile less than the current system How many miles does this equate to per year to break even if an 8 % cost of money is applied? rk &Tarquin h edon Ch 13 Authoned by Dr Don Smt Tex AM Univershy 36 C 5 7 9 delete E R T Y U O P

Answer 1

Let miles to be paved per year = M

AW of the system = -3000000 * (A/P, 8%,4) + 275 * M

For breakeven,

-3000000 * (A/P, 8%,4) + 275 * M = 0

275 * M = 3000000 * (A/P, 8%,4)

275 * M = 3000000 * 0.301921

M = 3000000 * 0.301921 / 275 = 3293.68 miles ~ 3294 miles (Nearest Whole number)