You and your partner have become very interested in cross-country motorcycle racing and wish to purchase entry-level equipment. You have identified two alternative sets of equipment and gear. Package K has a first cost of $160000, an operating cost of $10000 per quarter, and a salvage value of $40000 after its 2-year life. Package L has a first cost of $240000 with a lower operating cost of $3700 per quarter and an estimated $26000 salvage value after its 4-year life. Which package offers the lower present worth analysis at an interest rate of 8.00% per year, compounded quarterly? (Include a minus sign if necessary.) The present worth of package K is $ -111457.94 -185892.53 X Package L offers the lower present worth. and that of package L is $

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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You and your partner have become very interested in cross-country motorcycle racing
and wish to purchase entry-level equipment. You have identified two alternative sets
of equipment and gear. Package K has a first cost of $160000, an operating cost of
$10000 per quarter, and a salvage value of $40000 after its 2-year life. Package L has a
first cost of $240000 with a lower operating cost of $3700 per quarter and an estimated
$26000 salvage value after its 4-year life. Which package offers the lower present worth
analysis at an interest rate of 8.00% per year, compounded quarterly? (Include a minus sign
if necessary.)
The present worth of package K is $ -111457.94
-185892.53 X
Package L
.
offers the lower present worth.
and that of package L is $
Transcribed Image Text:You and your partner have become very interested in cross-country motorcycle racing and wish to purchase entry-level equipment. You have identified two alternative sets of equipment and gear. Package K has a first cost of $160000, an operating cost of $10000 per quarter, and a salvage value of $40000 after its 2-year life. Package L has a first cost of $240000 with a lower operating cost of $3700 per quarter and an estimated $26000 salvage value after its 4-year life. Which package offers the lower present worth analysis at an interest rate of 8.00% per year, compounded quarterly? (Include a minus sign if necessary.) The present worth of package K is $ -111457.94 -185892.53 X Package L . offers the lower present worth. and that of package L is $
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