Question

Question 3 (10 points) The machines shown below are under consideration for an improvement to an automated candy bar wrapping process. Machine C Machine D First cost, $ -50.000 -65,000 Annual cost, S/year -9,000 -10,000 Salvage value, S 12.000 25,000 Life. years (Source: Blank and Tarquin) Based on the data provided and using an interest rate of 8% per year, the correct equation to calculate the Annual Worth "AW" of Machine C is: AWC-50,000(P/A, 8%, 3) + 12,000(F/A, 8%, 3) -9,000 AWc = -50,000(A/P, 8%, 3) + 12.000(A/F, 8%, 3) -9,000(A/P, 8%, 3) AWC = -50,000(A/P, 8%, 3) + 12,000(A/F, 8%, 3) -9,000 AWC = -50,000(A/P, 8%, 3) + 25,000(A/F, 8%, 3) -10,000

Answer 1

The solution of Q.no. 3

For Machine C:

First cost = -50000

Annual cost = -9000

salvage value = 12000

life, years= 3

Annnual worth AW=

Aw = 50000(A/P, 8%,3) +12000(A/F, 8%,3) - 9000