What is the difference between net present worth of machine

Assignment Help Financial Management

Reference no: EM131925328

Machine A which is a basic model costs $125,000 and lasts 5 years. At the end of the 5 years it has a salvage value of $10,500 and its market value at the end of 3 years is $77,000. An enhanced model, Machine B sells for $176,000 and has a life of 8 years with a salvage value of $28,500. The benefit that these two machines are anticipated to provide is a constant $29,500 per year. Ignore inflation for costs and benefits. Looking at an 8-year window with a rate of 8% APR compounded yearly, what is the difference between the net present worth of Machine B over Machine A? (Hint: the second copy of Machine A can be sold at the end of the 8th year for the price that it will command after a 3-year life.)

Reference no: EM131925328

Questions Cloud

Identify the types of unethical behaviours : a) Identify the types of unethical behaviours that students at your educational institution may be using.

Discuss effective methods for scheduling time : In your response, discuss effective methods for scheduling time- or resource-constrained projects and the impact these methods have on the project.

Explain and evaluate the main themes found in existentialism : Explain and evaluate the main themes found in existentialism. Explain the meaning of being and nothingness according to Sartre.

Discuss goldratt observations regarding critical chain : Discuss Goldratt's observations regarding critical chain. What is the problem that he is trying to address, how does he go about analyzing the problem

What is the difference between net present worth of machine : what is the difference between the net present worth of Machine B over Machine A?

Society towards a fascist end state : Do you think that governments use the specter of terrorism to move the society towards a fascist end state?

What compels you to choose one brand over another : Consider the differences between targeted marketing and mass marketing and what led to the rise of each. Do you think one is more effective than the other?

What are all of the elements of a contract : What type of contract is this? What are all of the elements of a contract? Can Mary Jane avoid paying the additional $4,000.00?

Prepare a pecha kucha identifying the airframe : Prepare a Pecha Kucha identifying the airframe that you selected for your class project. Your Pecha Kucha should contain a rationale for your selection.

User Account

All Pages