Fnd the present worth of earthmoving equipment that has a first cost today of $143.000, an annual operating cost of $56,000, and a salvage value of 20% of the first cost after S yees, these estimates being in future dollars. Assume that the real interest rate is 12% per year and that infution has averaged 6% per yea Solve with infation ( not accounted for and accounted for. The present worth wth infistion not accounted for is $O. bị The present worth wth inflation accounted for is S

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Chapter1: Making Economics Decisions
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Find the present woth of earthmoving equipment that has a first cost today of $43,000, an annual operating cost of $56,000, and a
salvage value of 20% of the first cost after S years, these estimates being in future dollars. Assume that the real interest rate is 12% per
year and that inflation has averaged 6% per year Solve with intlation (a) not accounted for and (b) accounted for
* The present woith with inflation not accounted for is $
bị The present worth with infiation accounted for is $ O
Transcribed Image Text:Find the present woth of earthmoving equipment that has a first cost today of $43,000, an annual operating cost of $56,000, and a salvage value of 20% of the first cost after S years, these estimates being in future dollars. Assume that the real interest rate is 12% per year and that inflation has averaged 6% per year Solve with intlation (a) not accounted for and (b) accounted for * The present woith with inflation not accounted for is $ bị The present worth with infiation accounted for is $ O
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