QUESTION 18 as folow, use a 12% interest rate per year to find ltis estimated th
ID: 1164647 • Letter: Q
Question
QUESTION 18 as folow, use a 12% interest rate per year to find ltis estimated that dr and for aspecialized react will increase at a uniform rate per year. using the forecast ed revenues provided the present worth of these revenues Year 1 Revenue: $20,000 Year 2 Revenue: $22,000 Year 3 Revenue: $24,200 Year 4 Revenue: $26,620 Year 5 Revenue: $29,282 $77,890.36 $79,879.08 $86,153.37 $88,171.98 QUESTION 19 and will produce $310,750 per year in additional revenue. Additionally, labor and maintenance costs will be $110.250 per year. The company A machine costs $1,125,000 to purchase plans to use the machine for 10 years and then sell it for scrap for which it expects to receive $24, 000 MARR interest rate is 12.0%. Compute the net present worth. $15,693.67 $16,789.98 $17,789.90 O $21,19331Explanation / Answer
18.
Correct Answer:
C.
Working note:
Present worth of the revenue = 20000/1.12 + 22000/1.12^2 + 24200/1.12^3 + 26620/1.12^4 + 29282/1.12^5
Present worth of the revenue = $86153.37
19.
Correct Answer:
A.
Working note:
Net present worth = (310750-110250)*(1-1/1.12^10)/.12 + 24300/1.12^10 - 1125000
Net present worth = $15693.67