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There are 2 different alternatives for the machine that you plan to buy in your factory. In the table below, the annual revenue, annual cost, purchase price, lifetime and scrap sales values that these two alternatives will bring to the factory are given. The machine to be purchased will be sold at the value in the table at the end of its life. According to this table,

a) Find the economic condition (cash status) of your factory at the end of the life of the alternatives for each alternative at 8% annual interest.

b) Find the current values of the values you found in part a with the same interest rate (8%) for each alternative.

c) Find the values you found with 8% interest in section b for each alternative at varying interest rates (For example: 0% to 20%) and show them on the graph (Present Value vs Interest). Show on the graph at which interest rate the current values of the alternatives are equal (It will be more comfortable if you plot the two alternatives in one graph).Showranscribed image text

Machine Alternative 1 338 000 24000 Machice Alternative 2 134 000 COST ($) expense ($ / year) revenue ($/year) 30 000 PS It OY 90.000 80.000 (income) End of life selling 70 000 20 000 value ($) Lifetime (year) 8 4 . ir & 1 Machine Alternative 1 338 000 24000 Machice Alternative 2 134 000 COST ($) expense ($ / year) revenue ($/year) 30 000 PS It OY 90.000 80.000 (income) End of life selling 70 000 20 000 value ($) Lifetime (year) 8 4 . ir & 1

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