MS303_Assignment+11

MS303_Assignment 11 - 9.28 refer to PROBLEM 9.9 Before-tax MARR= Challenger Installation cost= Economic life= Market value EOY 12= Annual expenses=

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Before-tax MARR= 15% per year Challenger: Installation cost= $30,000 Economic life= 12 yrs. Market value EOY 12= $2,000 Annual expenses= $16,000 Defender: Present BV= $6,000 Present MV= $4,000 Data for the defender for the next 3 years are: Year MV at EOY BV at EOY 1 $3,000 $4,500 $20,000 2 $2,500 $3,000 $25,000 3 $2,000 $1,500 $30,000 Percent Change in Annual Expenses of Defender= 0.70% EOY, k MV Expenses CR Amount TC_k PW_k EUAC_k 0 $4,000 1 $3,000 $19,860 $1,600 $21,460.00 -$18,660.87 $21,460.00 2 $2,500 $24,825 $950 $25,775.00 -$38,150.47 $23,466.98 3 $2,000 $29,790 $875 $30,665.00 -$58,313.21 $25,539.84 "Use NPV "Use PMT Challenger: function" function" EUAC_12 (15%)= $21,465.46 "Use PMT function" EOY, k 0 1 $21,460 < $21,465.46 EUAC of Challenger 2 $25,775 3 $30,665 if the sign is > then replace the defender immediately, if the sign is < then the replacement would be delayed by at least one year. Expenses during
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This note was uploaded on 03/17/2012 for the course MS 303 taught by Professor T during the Spring '12 term at Sabancı University.

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MS303_Assignment 11 - 9.28 refer to PROBLEM 9.9 Before-tax MARR= Challenger Installation cost= Economic life= Market value EOY 12= Annual expenses=

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