Compute the net present worth of the alternative equipment

Assignment Help Microeconomics

Reference no: EM132158817

Question: In a present worth analysis of certain equipment, one alternative has a net present worth of +$420, based on a 6-year analysis period that equals the useful life of the alternative. A 10% interest rate was used in the computations. The alternative device is to be replaced at the end of the 6 years by an identical item with the same cost, benefits, and useful life. Using a 10% interest rate, compute the net present worth of the alternative equipment for the 12-year analysis period.

Reference no: EM132158817

Questions Cloud

How much could you afford to pay for given : The annual income from a rented house is $24,000. The annual expenses are $6000. If the house can be sold for $245,000 at the end of 10 years.

Number of controversies outside the pool : Phelps was embroiled in a number of controversies outside the pool. What impact did these shortcomings have on his brand value?

How much would the owner of a building be justified : How much would the owner of a building be justified in paying for a sprinkler system that will save $750 a year in insurance premiums.

What is the break-even level of earnings : Under a negative income tax system with a $10,000 guarantee and a 25% tax rate, what is the break-even level of earnings?

Compute the net present worth of the alternative equipment : In a present worth analysis of certain equipment, one alternative has a net present worth of +$420, based on a 6-year analysis period that equals the useful.

Answer without additional information : Suppose that for an economy, consumption is $14 trillion, tax revenue is $2.5 trillion, investment is $2 trillion, government spending is $4 trillion

Should the machine be purchased : A machine costs $980,000 to purchase and will provide $200,000 a year in benefits. The company plans to use the machine for 13 years and then will sell.

What investment can be justified for the new surface : Annual maintenance costs for a particular section of highway pavement are $2000. The placement of a new surface would reduce the annual maintenance cost.

How much would he be willing to pay for the quarry : A road building contractor has received a major highway construction contract that will require 50,000 m3 of crushed stone each year for 5 years.

User Account

All Pages