A machine costs 100,000. The revenue stream is 30,000
per year. It has operating expenses which are 5,000 the first year
and increase by 1000 dollars each year until t = 12.
The machine is then sold for 40,000 This is compared
with a second machine whose cost is 60,000. It has a revenue stream
that begins at t = 1 at 20,000 and increases each year by 2,000
until t = 12.
Operating expenses begin at 3,000 per year and increase
each year by 500 dollars per year until t = 12. salvage value is
3,000.
Compare the two machines using Future
Worth.
