Calculate the present worth

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Use the following cash flow for the problem:

i) In year 0 you paid $50000 for a machine

ii) In years 1 through 5 you made $10000 per year from the machine

iii) In year 3 you had to pay an additional $10000 to keep the machine going

iv) In year 5 you sold the machine for $20000

a. Draw the cash flow diagram for this problem.

b. Calculate the Present Worth (PW) at 10% interest.

c. Calculate the Future Worth (FW) at 10% interest.

e. Calculate the Annual Worth (AW) at 10% interest.

f. What is the payback period?

g. Does the payback period and the PW, FW, and AW make sense?

h. Is this a viable project?

Reference no: EM13893817

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