4. Machines X and Y are to be compared on the basis of present worth analysis. What is the
equation that will yield the present worth of Machine X for use in the analysis at 10% annual
interest rate?
Machine X
Machine Y
Initial Cost, $
Annual Cost, $/yr.
Salvage Value, $
Life, Years
80,000
95,000
20,000
15,000
10,000
30,000
2
4
(a) $PW_x = -80,000 - 15,000 (P/A, 10\%, 4) + 30,000 (P/F,10\%, 4)$
(b) $PW_x = -80,000 - 20,000 (P/A,10\%, 4) - 80,000 (P/F,10\%,2) + 10,000(P/F,10\%,4)$
(c) $PW_x = -80,000 - 20,000 (P/A, 10\%, 2) + 10,000 (P/F,10\%,2)$
(d) $PW_x = -80,000 - 20,000 (P/A, 10\%, 4) + 10,000 (P/F,10\%,4)$
(e) $PW_x = -80,000 - 20,000 (P/A,10\%,4) - 70,000 (P/F,10\%,2) + 10,000(P/F,10\%,4)$