Financial information about graders planned to be purchased is presented in the table below. Calculate the net present values of the machines with the least common multiple (LCM) approach. Choose the economically most suitable grader. MARR is specified as 16%. Purchase costs (TL) Annual repair-maintenance cost (TL) Major repair-maintenance (TL) Annual income (TL) Salvage value (end of 4th year) (TL) Economic life (years) Machine A 220.000+ 12.500*X 5.000 15.000 (at 3rd year) 110.000+ 2.000*Y 50.000 Machine B 300.000+ 14.500*Y 3.500 12.000 (at 3rd year) 140.000 + 1.200*X 70.000 6

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 2E
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 X=4; Y=7

Financial information about graders planned to be purchased is presented in the table below. Calculate the net
present values of the machines with the least common multiple (LCM) approach. Choose the economically
most suitable grader. MARR is specified as 16%.
Purchase costs (TL)
Annual repair-maintenance cost (TL)
Major repair-maintenance (TL)
Annual income (TL)
Salvage value (end of 4th year) (TL)
Economic life (years)
Machine A
220.000+ 12.500*X
5.000
15.000 (at 3rd year)
110.000+ 2.000*Y
50.000
4
Machine B
300.000 + 14.500*Y
3.500
12.000 (at 3rd year)
140.000 + 1.200*X
70.000
6
Transcribed Image Text:Financial information about graders planned to be purchased is presented in the table below. Calculate the net present values of the machines with the least common multiple (LCM) approach. Choose the economically most suitable grader. MARR is specified as 16%. Purchase costs (TL) Annual repair-maintenance cost (TL) Major repair-maintenance (TL) Annual income (TL) Salvage value (end of 4th year) (TL) Economic life (years) Machine A 220.000+ 12.500*X 5.000 15.000 (at 3rd year) 110.000+ 2.000*Y 50.000 4 Machine B 300.000 + 14.500*Y 3.500 12.000 (at 3rd year) 140.000 + 1.200*X 70.000 6
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