T1 T2 T3 T4 Useful Life 10 10 years 10 years 10 years First Cost $600,000 $800,000 $470,000 $540,000 Salvage Value $70,000 $130,000 $65,000 $200,000 Annual Revenue $400,000 $600,000 $260,000 $320,000 Annual Expenses $130,000 $270,000 $70,000 $120,000
T1 T2 T3 T4 Useful Life 10 10 years 10 years 10 years First Cost $600,000 $800,000 $470,000 $540,000 Salvage Value $70,000 $130,000 $65,000 $200,000 Annual Revenue $400,000 $600,000 $260,000 $320,000 Annual Expenses $130,000 $270,000 $70,000 $120,000
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
Dark Skies Observatory is considering several options to purchase a new deep space telescope. Revenue would be generated from the telescope by selling “time and use” slots to various researchers around the world. Four possible telescopes have been identified in addition to the possibility of not buying a telescope if none are financially attractive. The table below details the characteristics of each telescope. A present worth ranking analysis is to be performed. Solve, a. Determine the preferred telescope if MARR is 25%/year. b. Determine the preferred telescope if MARR is 42%/year.
Transcribed Image Text:T1
T2
T3
T4
Useful Life
10
10 years 10 years 10 years
First Cost
$600,000 $800,000 $470,000 $540,000
Salvage Value
$70,000 $130,000 $65,000 $200,000
Annual Revenue $400,000 $600,000 $260,000 $320,000
Annual Expenses $130,000 $270,000 $70,000 $120,000
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