Respond to the question with a concise and accurate answer, along with a clear explanation and step-by-step solution, or risk receiving a downvote. Modifying an assembly line has a first cost of $165,000 and its salvage value is $0. The firm’s interest rate is 10%. The savings shown in the table depend on whether the assembly line runs one, tow, or three shifts and on whether the product is made for 8 or 10 years. Calculate the expected present worth. Round to the nearest cent. Shifts/day Savings P(S) Useful Life P(L) 1 $27,500 25% 8 65% 2 $30,000 40% 10 35% 3 $32,500 35%
Respond to the question with a concise and accurate answer, along with a clear explanation and step-by-step solution, or risk receiving a downvote. Modifying an assembly line has a first cost of $165,000 and its salvage value is $0. The firm’s interest rate is 10%. The savings shown in the table depend on whether the assembly line runs one, tow, or three shifts and on whether the product is made for 8 or 10 years. Calculate the expected present worth. Round to the nearest cent. Shifts/day Savings P(S) Useful Life P(L) 1 $27,500 25% 8 65% 2 $30,000 40% 10 35% 3 $32,500 35%
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter4: Extent (how Much) Decisions
Section: Chapter Questions
Problem 4.4IP
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Respond to the question with a concise and accurate answer, along with a clear explanation and step-by-step solution, or risk receiving a downvote.
Modifying an assembly line has a first cost of $165,000 and its salvage value is $0. The firm’s interest rate is 10%. The savings shown in the table depend on whether the assembly line runs one, tow, or three shifts and on whether the product is made for 8 or 10 years. Calculate the expected present worth. Round to the nearest cent.
Shifts/day | Savings | P(S) | Useful Life | P(L) |
1 | $27,500 | 25% | 8 | 65% |
2 | $30,000 | 40% | 10 | 35% |
3 | $32,500 | 35% |
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