4. An industrial firm can purchase a special machine for $70,000. A down payment of $5,000 is required, and the unpaid balance can be paid off in five equal year-endinstallments at 9% interest. As an alternative, the machine can be purchased for $66,000 in cash. If the firm's MARR is 10%, use the annual equivalent method todetermine which alternative should be accepted.66 Click the icon to view the interest factors for discrete compounding when i= 9% per year.7 Click the icon to view the interest factors for discrete compounding when MARR = 10% per year.The annual equivalent worth of the first option is $(Round to the nearest dollar.)The annual equivalent worth of the second option is $(Round to the nearest dollar.)Select the correct choice from the drop-down menu below.(1).is a better choice.6: More InfoSingle PaymentEqual Payment SeriesCompoundPresentCompoundSinkingPresentCapitalAmountWorthAmountFundWorthRecoveryFactorFactorFactorFactorFactorFactor(F/P, i, N)(P/F, i, N)(F/A, i, N)(A/F, i, N)(PIA, I, N)(A/P, i, N)11.09000.91741.00001.00000.91741.09001.18810.84172.09000.47851.75910.568531.29500.77223.27810.30512.53130.395141.41160.70844.57310.21873.23970.30871.53860.64995.98470.16713.88970.25711.67710.59637.52330.13294.48590.222971.82800.54709,20040.10875.03300.198781.99260,501911,02850,09075.53480,18072.17190.460413.02100,07685.99520.1668102.36740.422415.19290.06586.41770.1558

Cost of Machine = $70,000 Down payment = $5,000 number of installments =…

An industrial firm can purchase a special machine for $70,000. A down payment of $5,000 is required, and the unpaid balance can be paid off in five equal year-end installments at 9% interest. As an alternative, the machine can be purchased for $66,000 in cash. If the firm's MARR is 10%, use the annual equivalent method to determine which alternative should be accepted. 6 Click the icon to view the interest factors for discrete compounding when i= 9% per year. 7 Click the icon to view the interest factors for discrete compounding when MARR = 10% per year. The annual equivalent worth of the first option is S (Round to the nearest dollar.) The annual equivalent worth of the second option is S -(Round to the nearest dollar.) Select the correct choice from the drop-down menu below. (1). - is a better choice.

An industrial firm can purchase a special machine for $70,000. A down payment of $5,000 is required, and the unpaid balance can be paid off in five equal year-end installments at 9% interest. As an alternative, the machine can be purchased for $66,000 in cash. If the firm's MARR is 10%, use the annual equivalent method to determine which alternative should be accepted. 6 Click the icon to view the interest factors for discrete compounding when i= 9% per year. 7 Click the icon to view the interest factors for discrete compounding when MARR = 10% per year. The annual equivalent worth of the first option is S (Round to the nearest dollar.) The annual equivalent worth of the second option is S -(Round to the nearest dollar.) Select the correct choice from the drop-down menu below. (1). - is a better choice.

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)

10th Edition

ISBN:9781337902571

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter12: Cash Flow Estimation And Risk Analysis

Section: Chapter Questions

Problem 10P: Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6...

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