What is the present worth of this investment alternative

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Reference no: EM132057941

1. An economic analysis is used to determine the profitability of a machine. Assume the minimum attractive rate of return (interest rate) is 3%. What is the present worth of this investment alternative?

Initial cost = $11,000

Estimated life = 7 years

Salvage value = 3,800

Annual maintenance cost = 475

Annual income = 1,800

Income gradient = 120

a. PW = $3,500

b. PW = $2,450

c. PW = $2,500

d. PW = $2,350

Reference no: EM132057941

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