Question

Please someone solve this so fast please

(20 pts) A manufacturer must choose t interest rate, choose which device to purchase (and justify your information shown in the following table. Use the present worth of the devices as your decision. 6. o use Device A or Device B in a factory. Assuming a 10% decision) based on the the basis for Useful Life 4 yearS 8 year Purchase Price Annual Benefit Salvage Value $200$180 $150 Device A $600 Device B $800 $200

Answer 1

ANSWER:

I =10%

A) Device A:

n = 4 years

Present worth = Purchase price + Annual benefit(p/a,i,n) + salvage value(p/f,i,n)

Present worth = -600 + 200(p/a,10%,4) + 150(p/f,10%,4)

Present worth = -600 + 200 * 3.17 + 150 * 0.683

Present worth = -600 + 634 + 102.45

Present worth = 136.45

B) Device B:

n = 8 years

Present worth = Purchase price + Annual benefit(p/a,i,n) + salvage value(p/f,i,n)

Present worth = -800 + 200(p/a,10%,8) + 180(p/f,10%,8)

Present worth = -800 + 200 * 5.335 + 180 * 0.4665

Present worth = -800 + 1,067 + 83.97

Present worth = 350.97

Based on Present worth , Device b will be chosen to purchase.