Craig Nuts Inc. will need to invest in a new nut cracking machine. The plant engineer has gathered the following data regarding the apparent best option. Calculate the future value of the alternative if the MARR is equal to 7% • First Cost $250,000 • • Annual Benefits $73,000 the first year and decreasing by $1,200 each year thereafter Annual O & M (Operation and Maintenance) Costs $28,000 the first year and increasing by $1,600 each year thereafter Salvage Value 42,000 • Useful Life 6 years a. The Net Future Worth of this investment =? b. Is this a good investment (Yes or No?) =?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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please answer all with complete solution, draw the cash flow diagram. thank you...

note: do not use excel please. thank youu
Craig Nuts Inc. will need to invest in a new nut cracking machine. The plant engineer has
gathered the following data regarding the apparent best option. Calculate the future value
of the alternative if the MARR is equal to 7%
• First Cost $250,000
Annual Benefits $73,000 the first year and decreasing by $1,200 each year thereafter
• Annual O & M (Operation and Maintenance) Costs $28,000 the first year and
increasing by $1,600 each year thereafter
Salvage Value 42,000
Useful Life 6 years
a. The Net Future Worth of this investment =?
b. Is this a good investment (Yes or No?) =?
Transcribed Image Text:Craig Nuts Inc. will need to invest in a new nut cracking machine. The plant engineer has gathered the following data regarding the apparent best option. Calculate the future value of the alternative if the MARR is equal to 7% • First Cost $250,000 Annual Benefits $73,000 the first year and decreasing by $1,200 each year thereafter • Annual O & M (Operation and Maintenance) Costs $28,000 the first year and increasing by $1,600 each year thereafter Salvage Value 42,000 Useful Life 6 years a. The Net Future Worth of this investment =? b. Is this a good investment (Yes or No?) =?
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