Answered: You bought the latest IPhone 13 for…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

1. You bought the latest IPhone 13 for your online selling business for Php 83,000.00. With this, your online income has increased by Php 1,000.00 anually. After 7 years, your Iphone 13 can be sold at Php 13,000.00. You have set your personal MARR to be at 8%. Was your purchase of the Iphone 13 economically viable? Show complete solution using Present Worth Method, Annual Worth Method, and Future Worth Method and with cashflow diagram.

2. Using the previous problem and using External Rate of Return Method, what should your MARR be so that you would have a breakeven? Is it even economically viable?

3. Using the previous problem and using Internal Rate of Return Method, at what value should the phone be bought so that you would have a breakeven?

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