Answer to Question #349963 in Civil and Environmental Engineering for NAA

Question

A new machine will cost $25,000. The machine is expected to last 4 years and has no salvage value. If the interest rate is 12%, determine the return and the risk associated with the purchase. Use present worth analysis.

Probability

0.3

0.4

0.3

Annual savings

$7,000

$8,500

$9,500