Calculate the annual worth.

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Q) Compare the alternatives below on the basis of their capitalized costs with adjustments made for inflation. Use i =13% per year and f = 2.6% per year. Alternative X Y First cost, $ -18,500,000 -10,500,000 AOC, $ per year −25,000 −10,000 Salvage value, $ 105,000 82,000 Life, years ∞ 10 a)The capitalized cost for alternative X is $ . b) The capitalized cost for alternative Y is $ . c) Select alternative (Click to select) Y X .

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Chapter 8, Problem 28P

To determine

Calculate the annual worth.

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Q) Compare the alternatives below on the basis of their capitalized costs with adjustments made for inflation. Use i =13% per year and f = 2.6% per year. Alternative X Y First cost, $ -18,500,000 -10,500,000 AOC, $ per year −25,000 −10,000 Salvage value, $ 105,000 82,000 Life, years ∞ 10 a)The capitalized cost for alternative X is $ . b) The capitalized cost for alternative Y is $ . c) Select alternative (Click to select) Y X .

Because retail supermarket corporations operate on a low ROR, it is common to use a market MARR of about 3% per year. What real return rate is implied from a market interest rate of 3% per year when the annual inflation rate is 4% per year? Explain your answer

Better Corporation can purchase a piece of equipment now for $120,000 or buy it 4 years from now for $188,000. The MARR requirement for the plant is a real return of 14% per year. If an inflation rate of 6% per year must be accounted for, what is the Future Value with inflation? a) $188,000 b) $255,873 c) $ 88,169 d) $120,000 Should the company buy the machine now or later? a) Now b) Later