Question

p1) a machine costs $30,000, with yearly operations and maintenance cost of $2000. operating machine saves $10,000 in labor costs. machine lifetime is five years, with an end of life salvage value of $7000. what is euaw at 7%? would it be better to use the machine, or do nothing?

Answer 1

The EUAW is 1900 and is better to use machine than since EUAW or Equivalent Uniform Annual Worth is positive.

Why is annual worth analysis crucial?

Because only one life cycle's AW value needs to be determined, the annual worth technique has a significant computational and interpretive advantage. The AW for one life cycle determines the AW for all subsequent life cycles. When comparing options with differing life spans, this method has the significant benefit over all the others in that it does not need comparing across the least common multiple (LCM) of years. In other words, only one life cycle is used to determine the AW value of the alternative.

Find EUAW = 30000 (A/P, 7% ,5) +(10000 - 2000) + 7000(A/F, 7%, 5)

= - 30000×0.2439 + 8000 + 7000×0.1739

= 1900

Thus EUAW is 1900.

To learn more about the calculation of EUAW, visit:

https://brainly.com/question/16901257

#SPJ4