C. Either alt Borat. C O D. Alt A 5 NPW of Cash Flows Philipp Inc, a German comp

Question

C. Either alt Borat. C O D. Alt A 5 NPW of Cash Flows Philipp Inc, a German company is considering the following two equipment alternatives for their plant in Tennessee. The cost information for those two machines (which are under consideration, is given in table beow. d out of Machine X Machine y Cost $80,000 $66,000 $12 000 for the first 10 years & $9,000 per year 000 for the next 10 years for 20 years 20 years Ivage Value MARR $30,000 $20,000 10.0% a. The NPW of machine X is? Answer format S xxxX Answer 13594 Subject: NPW of Cash Flows ved

Explanation / Answer

Present worth = Cashflow / ((1 + MARR)^number of period)

Net Present worth = Sum of the present worths of all the cashflows

Assume that the asset is sold after the useful life for the salvage value

Year Cashflow MARR PW NPW 0 -$80,000 10% -$80,000.00 $17,146.09 1 $12,000 10% $10,909.09 2 $12,000 10% $9,917.36 3 $12,000 10% $9,015.78 4 $12,000 10% $8,196.16 5 $12,000 10% $7,451.06 6 $12,000 10% $6,773.69 7 $12,000 10% $6,157.90 8 $12,000 10% $5,598.09 9 $12,000 10% $5,089.17 10 $12,000 10% $4,626.52 11 $8,000 10% $2,803.95 12 $8,000 10% $2,549.05 13 $8,000 10% $2,317.32 14 $8,000 10% $2,106.65 15 $8,000 10% $1,915.14 16 $8,000 10% $1,741.03 17 $8,000 10% $1,582.76 18 $8,000 10% $1,438.87 19 $8,000 10% $1,308.06 20 $38,000 10% $5,648.46

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