Solution-Determine the equivalent present worth of this

Determine the equivalent present worth of this seven years

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Questions - Without using excel (so by using written equations):

Q1. Oregon Mill Works is considering purchasing a large resawing band saw for $30,000. The saw has a useful life estimated to be seven years, at which point it will have an estimated salvage value of $8,000. Annual income each year for the 7 years is $9000. Annual operating expenses are $3,000. Assuming an interest rate (MARR) of 7.5%, determine the equivalent present worth of this seven years of cash flows. Include a cash flow diagram in your written work.

Q2. Jacob Smith Investors places $50,000 in an investment fund. One year after making the investment, Smith receives $7500 and continues to receive $7500 annually until 10 such amounts are received. Smith receives nothing further until 15 years after the initial investment, at which time $50,000 is received. Assuming an interest rate (MARR) of 10%, determine the equivalent present worth of this 15 years of cash flows. Include a cash flow diagram in your written work.

Reference no: EM132726915

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Determine the equivalent present worth of this seven years

Reference no: EM132726915

Reference no: EM132726915

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