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Problem data:
90/10 | 70/30 | |
P | $9,700 | $16,500 |
n | 7 yrs | 10 yrs |
i% | 0.08 | 0.08 |
t | 0.44 | 0.44 |
S | 0 | 0 |
Solution:
90/10 | 70/30 | ||
1 | -P | -$9,700 | -$16,500 |
{t(P-S)/n} | $609.71 | 726.00 | |
| 5.206 | 6.710 | ||
2 | {t(P-S)/n}(P/A, i%, n) | $3,174 | $4,871 |
3 | -(1-t)(X)(P/A, i%, n) | 0 | 0 |
4 | 0 | 0 | |
PW | Sum 1 + 2 + 3 + 4 | -$6,526 | -$11,628 |
0.1921 | 0.1490 | ||
A | (PW)(A/P, i%, n) | -$1,253 | -$1,733 |
Answer: The 90/10 copper-nickel alloy is thus a more cost economical solution