7A) You are in the pizza business and want to buy a new pizza making machine. The machine costs $15051 today. At the end of each year you own the machine it will give you returns of $3420 after paying for maintenance and repairs. [Go on to 7B.]

7A) You are in the pizza business and want to buy a new pizza making machine. The machine costs $15051 today. At the end of each year you own the machine it will give you returns of $3420 after paying for maintenance and repairs. [Go on to 7B.]

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter8: Depreciation, Cost Recovery, Amortization, And Depletion

Section: Chapter Questions

Problem 44P

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Factors Affecting Housing Decision

Question

7A) You are in the pizza business and want to buy a new
pizza making machine. The machine costs $15051
today. At the end of each year you own the machine
it will give you returns of $3420 after paying for
maintenance and repairs. [Go on to 7B.]

What's the present value of the COST of the
machine if the interest rate is:
10) 3%?
11) 7%?
12) 11%?

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