Homework Answers
Answer to question 5:
The cash flow of machine A is as follows
Year year 1 year 2 year 3 year 4 year 5
A Cashflow -5000 0. 0. 0. 0
B Cashflow -7000 0 0 0. +3000
Saving. 2000 2000 2000 2000 2000
By subtracting method of payback, for machine A the payback is 2.5years
By the same method, for machine B rh payback period is 3.5 years
Purely on payback method, machine A is best alternative.
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Question 5. (20 points): A machine will be phase out in 5 years, but it currently...
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In need of assistance with Uniform Annual Worth and how number 5
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Please show in Excel
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Question 1 A. Using Ms Excel, find out which alternative should be selected on the basis of the Present Worth method, if the rate of interest is 8% per year. • Alternative 1: Initial purchase price = $2500000, Annual operating cost $45000 at the end of 1st year and increasing by $3000 in the subsequent years till the end of useful life, Annual income = $120000, Salvage value = $550000, Useful life = 3 years. Alternative 2: Initial purchase price...
In need of assistance with Uniform Annual Worth and how number 5
should be solved.
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Please show in Excel
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