Determine the single sum of money occurring

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ABC Company purchases a machine for $40,000, keeps it for six years and sells it for $5,000. During the time the machine was used by the company, O&M cost totaled $5,000 the first year, $6,000 the second year, $8,000 the third year, $9,500 the fourth year, $11,000 the fifth year and $12,500 the sixth year. The company uses a 10% interest rate in performing economic analyses. For accounting purposes, all O&M cost are computed at end of year. Determine the single sum of money occurring (1) at t=0; and (2) at t=6, which is equivalent to the cash flow history for the machine. Also, determine the uniform series occurring over the 6 years internal that is equivalent to the cash flows profile for the machine.

Reference no: EM13998342

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