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a new utility service truck can be purchase for $64,532. its expected useful like is six...

a new utility service truck can be purchase for $64,532. its expected useful like is six years, at which time its market value will the zero. Annual receipts less expenses will be approximately $24,162 per year over the six year study period. compute present worth(pw) with a MARR of 20% to determine wheter this is good investment.

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Answer #1

Ans: PW = $15818.73

Yes this is a good investment.

Explanation:

Initial investment ( P ) = $64,532

Net annual revenue ( A ) = $24,162

Number of interest period ( n ) = 6

Interest rate ( i ) = 20%

Present Worth = - P + A ( P / A , i ,n )

= - $64532 + $24162 ( P / A , 20% , 6 )

= -$64532 + $24162 ( 3.3255 )

= - $64532 + $80350.73

= $15818.73

This is a good investment due to  the positive present worth value .

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