Find the present worth of each alternative

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Reference no: EM132022833

A company is considering two investment alternatives.

Alternative A is a new machine that costs $50,000 and will last for ten years with no salvage value. It will save the company $8423 per year and the savings will increase by $2120 each year.

Alternative B is a is a machine that will cost $75,000 and last 10 years. The salvage value at the end of 10 years is $25,000. It will save $10292 per year.

Find the present worth of each alternative if the company as a MARR of 10.5%/year.

Alternative A $

Alternative B $

(On the test you must be able to tell me that you would select the one with the higher present value.)

Reference no: EM132022833

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