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1. Susan can install the same more-efficient motor in another assembly line. This other line is producing (and operating) 25% more each year. The more efficient motor has no sal- vage value after a life of 5 years, costs $3000 more installed, and will save $800 the first year. What is the PW if MidWestTech uses an i of 10%?

2. A company in Texas will "buy" inheritances before they are actually received. If you will receive $20,000 when a rich aunt dies, how much would you accept now for this future inheritance? Money is worth 8% to you, and you "guesstimate" that your aunt will live 6 more years. (Answer: $12.60K)

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M91718849

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