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WORD
WORD
EKONOMI TEKNIK
OLEH:
MUH. ADHE BOELQIAH
D111 18 1020
GOWA
2020
1. If a mining company purchased a new excavator for $6000 and sold it 3 years later for $2000,
what was the equivalent uniform annual worth if the company spent $750 per year for upkeep
and operation? Use an interest rate of 15% per year and the salvage sinking fund method,
salvage present worth method, and capital recovery plus interest method.
Answer :
Machine A Machine B
The EUAW of each machine using the Salvage Sinking – Fund Method
EUAWA = P (A/P, 12%, 7) – SV (A/F, 12%, 7) + $1600
= 15000(0,2191) – 3000(0,0991) + $1600
= $4589.2
EUAWB = P (A/P, 12%, 10) – SV (A/F, 12%, 10) + $400
= 25000(0,1770) – 6000(0,0570) + $400
= $4483
Machine that should be selected using the following method is Machine B, since it has the lower
EUAWB compared to EUAWA.