hw_7_prob_4

# hw_7_prob_4 - -100(P/F,12,2(3000 100(P/F,12,5 \$(10,776.84...

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#4 Part A Options: 1 Buy Machine A and use it for 4 years, then lease for 1 year 2 Buy Machine B and use it for 5 years 3 Lease a machine for 5 years 4 Buy Machine A use it for 4 years, then buy another Machine A use it for 1 year 5 Buy Machine A and use it for 4 years, then buy Machine B and use it for 1 year Part B Option 1: PW(12%) =-\$6800+(600-100)(P/F,12%,4)-750(P/A,12%,4)-250(P/F,12%,3)
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Unformatted text preview: -100(P/F,12%,2)-(3000+100)(P/F,12%,5) \$(10,776.84) AEC(12%)=-C13(A/P,12%,5) \$2,989.49 Option 2: PW(12%) =-\$8400+1000(P/F,12%,5)-520(P/A,12%,5)-280(P/F,12%,4) \$(9,885.04) AEC(12%)=-C17(A/P,12%,5) \$2,742.11 Option 3: AEC(12%)=[3000+3000(P/A,12%,4)](A/P,12%,5) \$3,359.84 Option 2 is the best because it is the least expensive....
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