(Solve using Excel only and show your work done in Excel) Two storage structures, given...
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(Solve using Excel only and show your work done in Excel)
Two storage structures, given code names Y and Z, are being considered for a military base. The military uses a 13% per year expected rate of return and a 24-year life for decisions of this type. The relevant characteristics for each structure are shown below.
| First Cost | 30754 | 35445 |
| Estimated Life | 12 years | 24 years |
| Estimated Salvage Value | None | 1800 |
| Annual Maintenance Cost | 1000 | 720 |
a)What is the future worth of each machine?
b)What is the decision rule for determining the preferred machine based on future worth ranking?
c)Which structure should be recommended?
d)Plot a graph for both alternatives future worth changes with expected ARR (annual rate of return) if expected annual rate of return varies from 13% to 16%
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