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A company is looking to purchase a machine for $9,000 which could be sold for $800 after 6 years. Operating and maintenance costs for the machine will be $1,200 every year. The machine is expected to save $3,600 in production costs every year. If the company's MARR is 15%, what is the annual equivalent AE(i) of the machine? Would it be a good investment? i = er/K - 1 ia = e" - 1 i= (1+)-1 1-(1)-1 AE(i) = PW(i)(A/P,i,1) F (1 + i) - 1 Flow Type Factor Notation Formula Compound F = P(1 + i) 1 Amount N (F/P, 1, N) G Present L Worth P = F(1 + i) - E (P/F, 1, 1) E Compound (1 + i) - Q Amount F= U (F/A, 1, N) A L Sinking A fund A = Y (A/F, 1, N) M E N T Present (1 + i)- 1 worth P= i(1 + i) S (P/A,1,N) E R I Capital i(1 + i) E recovery A =P L(1 + i)N - 1 S (A/P, 1, 1) CR(i) = (1 - 5)(A/P,1,N) is AEC(i) = a + bx + x = PW(i*) = 0 An, inflows (1 + i)N-n An outflows(1 + k)- = (1 + MIRR)N ax2 + bx + c = 0 -b + Vb2 - 4ac 2a Linear gradient PE G R A D I E N [" (1 + i) iN - ;(1 + in '] Parameters Find Given Algebraic Notation Factor Notation Present worth (P/G, 1, 1) Equal-payment Conversion factor (A/G, I, N) Geometric gradient AN-1 A = (1 + i) - iN - 11 i[(1 + i)N 1] P A LrN (P/A, r, N) re P (A/P r, ) S E R I E S [1 (1 + g)'(1 + i) A F (FIA,r, N) P = Present worth (P/A,8,1,N) [] [] A, G) - (if i = g) A F /P,r, N)

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