Suppose that a company needs new equipment, and that the machinery in question earns the company revenue at a continuous rate of 58000t + 39000 dollars per year during the first six months of operation, and at the continuous rate of $68000 per year after the first six months. The cost of the machine is $145000. The interest rate is 8% per year, compounded continuously. a) Find the present value of the revenue earned by the machine during the first year of operation. Round your answer to the nearest cent. Value: $59503.66 b) Determine how long it will take for the machine to pay for itself; that is, how long until the present value of the revenue is equal to the cost of the machine. Round your answer to the nearest hundredth. Years:

Suppose that a company needs new equipment, and that the machinery in question earns the company revenue at a continuous rate of 58000t + 39000 dollars per year during the first six months of operation, and at the continuous rate of $68000 per year after the first six months. The cost of the machine is $145000. The interest rate is 8% per year, compounded continuously. a) Find the present value of the revenue earned by the machine during the first year of operation. Round your answer to the nearest cent. Value: $59503.66 b) Determine how long it will take for the machine to pay for itself; that is, how long until the present value of the revenue is equal to the cost of the machine. Round your answer to the nearest hundredth. Years:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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