A company bought a piece of machinery for $15,000 with an annual operating cost of $750....
A company bought a piece of machinery for $15,000 with an annual operating cost of $750. There is no maintenance for the first 2 years, but after that maintenance is $500 per year over the 11 year life span of the machine. In year 7, there is an repair cost of $1500 and the equipment has a salvage value of $800. What is the present value of this piece of machinery?
i=10%
Homework Answers
i = 10%
PW = -15000 -750*(P/A,10%,11) - 500*(P/A,10%,9)*(P/F,10%,2) - 1500*(P/F,10%,7) + 800*(P/F,10%,11)
= -15000 - 750*6.49506 - 500*5.75902*0.82644 - 1500*0.51315 + 800*0.35049
= -22740.37
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A company bought a piece of machinery for $15,000 with an annual
operating cost of $750....
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