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1) A ski resort wishes to evaluate two alternative machines for ski and board tuning. Select the best alternative using the A
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Answer #1

Here we need to calculate the annual worth of Machine R and Machine S. That is,

AWR= -250, 000(A/P,6%, 4) – 40,000 + 20,000(A/F, 6%, 4)

  = -250,000(0.2886) - 40.000 + 20,000(0.2286)

  =-72.150 -40,000 +4.572

  = -$107,578

AWS = -370, 500(A/P,6%, 3) – 50,000 + 20, 000(A/F,6%,3)

  = -370,500(0.3741) - 50.000 + 20,000(0.3141)

  = -138.604.05 - 50.000 +6.282

  =-$182.322.05

The best machine for ski resort is Machine R. Numerically it gives more AW value.

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