parker hannifin of cleveland ohio, manufactures CNG fule dispensers . It needs r
ID: 1142269 • Letter: P
Question
parker hannifin of cleveland ohio, manufactures CNG fule dispensers . It needs replacment equipment to streamline one of its production lines for a new contract, but it plans to sell the equpment at or before its expected life is reached at an estimated market value for used equipment . pter 5 homework Required information Problem 05.028 DEPENDENT MULTI-PART PROBLEM-ASSIGN ALL PARTS Parker Hannifin of Cleveland, Ohio, manufactures CNG fuel dispensers. It needs replacement equipment to streamline one of its production ines for a new contract, but R plans to sell the equipment at or before its expected life is reached at an estimated market value for used equipment Problem 05.028.a Future Worth Analysis Select between the two options using the corporate MAAR of 15% per year and a future worth analysis for the expected use period irst Cost 9.000 15.000 11250 xpected Use The future worth of option D is$ The future worth of option Es $ Option (Cack o set)is selected. .pry 4 5 of7 Next > 6 8 0 SDFG HUKL XCBNMExplanation / Answer
ANSWER:
1) Option d
we will 1st find the present worth and then the future worth.
pw = first cost + aoc(p/a,i,n) + emv(p/f,i,n)
i = 15% and n = 3 years
pw = -79,000 - 19,000(p/a,15%,3) + 11,250(p/f,15%,3)
pw = -79,000 - 19,000 * 2.283 + 11,250 * 0.6575
pw = -79,000 - 43,377 + 7,386.875
pw = -$114,980.125
fw = pw(f/p,i,n)
fw = -114,980.125(f/p,15%,3)
fw = -114,980.125 * 1.521
fw = -$174,884.77
2) Option e
we will 1st find the present worth and then the future worth.
pw = first cost + aoc(p/a,i,n) + emv(p/f,i,n)
i = 15% and n = 6 years
pw = -89,000 - 15,000(p/a,15%,6) + 12,250(p/f,15%,6)
pw = -89,000 - 15,000 * 3.784 + 12,250 * 0.4323
pw = -89,000 - 56,760 + 5,295.675
pw = -$140,464.325
fw = pw(f/p,i,n)
fw = -140,464.325(f/p,15%,6)
fw = -140,464.325 * 2.313
fw = -$324,893.984
since the future worth of option d is more , therefore we will select option d.
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