A piece of research equipment is expected to require an investment of $18,000, with $6,000 committed now and next year $7000 while the remaining $6K will be pay out at the end of year 2. Annual operating costs for the system are expected to start in the first year and continue at $800 per year. The life of the equipment is 8 years with a salvage value of $500. Calculate the CR and AW values for the system, if the corporate MARR is 14.32% per year.
Year wise cash flow are given
Present value =(1+i)ncf
For year 0 =(1+14.32%)0−6000=−6000
For year 1 =(1+14.32%)1−6000=−5248.42
For year 2 =(1+14.32%)2−6000=−4590.99
For year 8 =(1+14.32%)8−500=171.39
Capital recovery =−6000−5248.42−4590.99+171.39
Capital recovery =−15668.02
Annual worth =−15668.02−800=−16468.02
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