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Merry Industries is considering a new piece of equipment for a project lasting 10 years with...

Merry Industries is considering a new piece of equipment for a project lasting 10 years with details as shown below. The costs and benefits are expected to keep increasing with the inflation rate even when a new machine is put into operation. Taking these into account, what is the annual worth that the company can expect from the machine?
Initial cost $245,000
MARR 18% p y c y
Inflation rate 6% p y c y
Life 7 years
Project life 10 years
Machine value today with life of 3 years $76,500
Machine value today with life of 7 years $143,500
First year costs $65,200
First year benefits $140,80

$20,896

$28,678

$24,876

$32,865

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jeff jeffy answered 2 years ago
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