Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
1.) What are the 3 assumptions that must be considered when using the LCM approach in comparing PW of different
life alternatives?
Question 2 in image, thank you.
![MACHINE
Initial Cost, $
AOC, $ / year
Annual Revenue, $ / year
Salvage Value, $
Life, years
Given interest rate of 15%
(a) What is the Present Worth (PW) of Machine X?
(b) What is the Future Worth (FW) of Machine X?
(c) What is the Capitalized Cost of machine Y?
X
Y
-275,000 -150,000
-25,000 -40,000
125,000
65,000
50,000
15,000
3
6](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F20882952-892a-4614-8f68-4ce322ffada8%2Fe381e1b2-5596-4be1-99a2-08e80b9edc1c%2F65jyht_processed.jpeg&w=3840&q=75)
Transcribed Image Text:MACHINE
Initial Cost, $
AOC, $ / year
Annual Revenue, $ / year
Salvage Value, $
Life, years
Given interest rate of 15%
(a) What is the Present Worth (PW) of Machine X?
(b) What is the Future Worth (FW) of Machine X?
(c) What is the Capitalized Cost of machine Y?
X
Y
-275,000 -150,000
-25,000 -40,000
125,000
65,000
50,000
15,000
3
6
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