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With ROI of 10%, there exist three e %, there exist three equal-service machines with the costs shown below. Revenues for all
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Answer #1

Solution :- (1)

Present Value = Initial Cost + Annual Cost * PVAF (10% , 5) - Salvage Value * PVF(10%,5)

In Case of Electric Powered :-

= 2500 + 900* PVAF (10% , 5) - Salvage Value * PVF(10%,5)

= 2500 + 900*(3.79)  - 200*(0.621)

= 2500 + 3411.71 - 124.2

= $5,787.51

In Case of Gas Powered :-

= 3500 + 700* PVAF (10% , 5) - 350 * PVF(10%,5)

= 3500 + 700*(3.79)  - 350*(0.621)

= 3500 + 2653 - 217.35

= $5,935.65

In Case of Solar Powered :-

= 6000 + 50* PVAF (10% , 5) - 100 * PVF(10%,5)

= 6000 + 50*(3.79)  - 100*(0.621)

= 6000 + 189.5 - 62.1

= $6,127.4

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