# TransITRI is a transportation company with a recent need of a new construction equipment at a first cost of \$78,000 (Equation (1)), zero salvage value, and a cash flow before taxes (CFBT) per year t that follows Equation (2).                                            CFBT = \$30,000 – 3,000t (for t = 1, 2, … T)                                       (1)                                            CFBT = - \$78,000 (for t =0)                                                                  (2)Calculate the PW if the economic life of similar machinery is 8 years, while the MARR is 16%, 20%, and 24%

Question
1 views

TransITRI is a transportation company with a recent need of a new construction equipment at a first cost of \$78,000 (Equation (1)), zero salvage value, and a cash flow before taxes (CFBT) per year t that follows Equation (2).

CFBT = \$30,000 – 3,000t (for t = 1, 2, … T)                                       (1)

CFBT = - \$78,000 (for t =0)                                                                  (2)

Calculate the PW if the economic life of similar machinery is 8 years, while the MARR is 16%, 20%, and 24%

check_circle

Step 1

Present worth can be calculated by taking the difference of present value of cash inflow and present value of cash outflow.

The below table shows the calculation of present worth at 16%:

Step 2

The resultant figures are shown below:

Step 3

The below table shows the calculati...

### Want to see the full answer?

See Solution

#### Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in