Sign In Sign Up Ask an AI advisor
deadlydazy13
deadlydazy13
18.10.2019 • 
Business

Afirm will choose one of two projects. both projects have useful lives of 10 years. project a has an initial cost of $10,000, annual fuel cost of $500 per year, maintenance cost of $100 at the end of year 1 that increases by $25 per year thereafter, a salvage value of $1,000, and annual benefits of $2,300. project b has an initial cost of $13,000, annual fuel cost of $400 per year, maintenance cost of $100 at the end of year 1 that increases by 10% per year thereafter, a salvage value of $2,000, and annual benefits of $2,500. evaluate the present worth using an interest rate of 8 percent, compounded annually. 3 (a). (1 pt.) what is the present value of the fuel cost for project a ($)? (b). (1 pt.) what is the present value of maintenance cost for project a ($)? (c). (1 pt.) what is the present value of the salvage value for project a ($)? (d). (1 pt.) what is the present worth of annual benefits for project a ($)? (e). (1 pt.) what is the present worth of project a ($)? (f). (1 pt.) what is the present value of the fuel cost for project b ($)? (g). (1 pt.) what is the present value of the maintenance cost for project b ($)? (h). (1 pt.) what is the present value of the salvage value for project b ($)? (i). (1 pt.) what is the present worth of the annual benefits for project b ($)? (j). (1 pt.) what is the present worth of project b ($)?

Solved
Show answers

Ask an AI advisor a question

I want advice