Calculate the future worth of the purchase shown below using an interest rate of 6% per...

Question

Question

Calculate the future worth of the purchase shown below using an interest rate of 6% per year.

First Cost: -$17,000

Operating Cost: -$3,000/YR

Salvage Value: $2,000

Useful Life: 7 Years

Answer 1

Answer #1

ANSWER:

I = 6%

FW = first cost(f/p,i,n) + operating cost(f/a,i,n) + salvage value

fw = -17,000(f/p,6%,7) - 3,000(f/a,6%,7) + 2,000

fw = -17,000 * 1.504 - 3,000 * 8.394 + 2,000

fw = - 25,568 - 25,182 + 2,000

fw = - 48,750

so the future worth is -$48,750

Add a comment

Answer 2

Similar Homework Help Questions

3. Compare the alternatives shown below on the basis of their Annual Worth, using an interest rate of 12% per year....

3. Compare the alternatives shown below on the basis of their Annual Worth, using an interest rate of 12% per year. Alternative I Alternative II First Cost 160,000 25,000 Annual Operating Cost 15,000 3,000 Salvage Value 1,000,000 4,000 Life, Years
3. Compare the alternatives shown below on the basis of their Annual Worth, using an interest...

3. Compare the alternatives shown below on the basis of their Annual Worth, using an interest rate of 12% per year. Alternative I Alternative II 160.000 25,000 First Cost 15.000 3,000 Annual Operating Cost 1,000,000 4,000 Salvage Value Life. Years
Please dont use excel,show me the formula used 7. Compare the alternatives shown below on the...

Please dont use excel,show me the formula used 7. Compare the alternatives shown below on the basis of a future worth analysis, using an interest rate of 8% per year. Р First cost, $ Annual operating cost, $ per year Salvage value, $ Life, years -23.000 -4,000 3,000 -30,000 -2.500 1.000

Calculate the present worth of the Alternative "A". Assume the interest rate is 2% per year,...

Calculate the present worth of the Alternative "A". Assume the interest rate is 2% per year, compounded annually. Alternative A Initial cost $1,000,000 Annual maintenance cost $50,000 Overhaul cost every 4 years $200,000 Salvage value $400,000 Useful life 40 years
Question 1 A. Using Ms Excel, find out which alternative should be selected on the basis...

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...
6. Analyze the two economic alternatives described below and seleot the annual interest rate of 7%...

6. Analyze the two economic alternatives described below and seleot the annual interest rate of 7% for both alternatives. All values are in$. best one. Use an Alternative Initial Cost Yearly Operating Expenses Annual Revenues Salvage Value Life (years) 22,000 10,000 2,000 3,000 6,000 10.000 2

Calculate the present worth of all costs for a newly acquired machine with an initial cost...

Calculate the present worth of all costs for a newly acquired machine with an initial cost of $40,000, no trade-in value, a life of 12 years, and an annual operating cost of $17,000 for the first 5 years, increasing by 10% per year thereafter. Use an interest rate of 10% per year. The present worth of all costs for a newly acquired machine is determined to be
Calculate the present worth of all costs for a newly acquired machine with an initial cost...

Calculate the present worth of all costs for a newly acquired machine with an initial cost of $34,000, no trade-in value, a life of 14 years, and an annual operating cost of $17,000 for the first 3 years, increasing by 10% per year thereafter. Use an interest rate of 10% per year. The present worth of all costs for a newly acquired machine is determined to be $
show me through an equation please. thank you. 3. Using present worth analysis, decide which of...

show me through an equation please. thank you. 3. Using present worth analysis, decide which of the two options shown below is the best at 6% annual interest. First cost O&M Annual benefits Overhaul at the end of year 4 Salvage value Useful life, in years Machine A $15,000 $600 $5,000 $0 $1,000 Machine B $20,000 $400 $5,200 $1,000 $2,000 4

Problem 1 The City of Miami plans to purchase an important machine. The initial cost is...

Problem 1 The City of Miami plans to purchase an important machine. The initial cost is determined to be 250,000. It is estimated that this new equipment will save $110,000 the first year and increase radually by $35,000 for the next 6 years. MARR:10%, what is the Net Future worth of this investment? $1, Problem 2 For the cash flows given in the table below, evaluate the unknown value "A". Use an interest rate of 6%. 0 $25,000 Year Cash...