Problem
1) You can choose between Machine A or B. Your interest rate is 6%. You need a Machine for an infinite time.
Machine A costs $22,000 and lasts for 3 years. It has no salvage value, and costs an additional $15,000 each year to operate.
Machine B costs $40,500 and lasts for 4 years. It has a salvage value of $20,000 and costs $2,000/year to operate.
Can you use the AEW method?
What is the Annual cost of the cheapest machine?
2) What is the IRR for a tractor that costs $150,000 and has a salvage value 4 years later for $55,000. The machine generates $25,000 each year in profit.
Is this a good investment if your MARR=8%?
3) An investment has the following 5 cash flows, where the first cash flow occurs at time period 0. -10,000; +6,000; -4000, +4,500; +4,000.
Is this Simple or Nonsimple?
How many rates of return are there?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.