Please ignore the answers ive already put, i need help solving all of them A pie

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Please ignore the answers ive already put, i need help solving all of them

A piece of production equipment is to be replaced immediately because it no longer meets quality requirements for the end product. The two best alternatives are a used piece of equipment (E1) and a new automated model (E2). The economic estimates for each are shown in the accompanying table. The MARR is 18% per year Alternative E1 E2 Capital investment Annual expenses Useful life (years) Market value (at the end of useful life) $15,000 $66,000 $14,000 $9,000 20 $8,500 $12,000

Explanation / Answer

A) statement showing AW

Since outflow is less in E1 we shold select that alternative

Particulars E1 E2 Capital inestment -15000 -66000 PV of salvage value 8500/(1.18)^5 3715.43 12000/(1.18)^20 438.1 PV of expenses -11284.57 -65561.9 Capital recovery factor(inverse of PVIFA) 1/3.1271 0.3198 1/5.3527 0.187 Equilised annual payment -3608.64 -12248.39 Add :Annual expense -14000 -9000 Total AW -17608.64 -21248.39

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