Determine the annual worth of the project

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Reference no: EM132671607

Problem 1 - An equipment has been purchased for a project to be completed in 6 years. The initial cost of equipment was Rs. 7,500,000. It is estimated that the used equipment can be sold in auction at a price of Rs. 1,200,000 after completion of the project. The expected/planned yearly usage of the equipment is as follows:

Year

Equipment Usage (Hours)

1

140

2

170

3

230

4

80

5

110

6

70

Develop the yearly depreciation schedule of the equipment according to:

a) Sum-of-Years-Digit Method

b) Units-of-production Method

c) Double Declining Balance Method

Problem 2 - The following cash flow is associated with a project under consideration in your company. Determine the annual worth of the project, if the MARR for the company is 13%.

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Reference no: EM132671607

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