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MHrtz
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Homework Statement
A Machine at a cost of $5,000 was purchased 3 years ago. It can be sold now for $3,000. If the machine is kept, the annual operating and maintenance costs will be $1,500. If it is kept and operated for next five years, determine the amount at time 0 (now) equivalent to the cost of owning and operating the machine can be sold for $1,000 at the end of the five year period. Use an interest rate of 10%.
A. 8065
B. 6550
C. 9522
D. 5002
Homework Equations
Not exactly sure which to use but here are the ones from the chapter we are studying:
F = P(1 + i)^n
F = A [((1 + i)^n - 1))/i]
P = A [((1 + i)^n - 1))/((i(1 + i)^n))]
The Attempt at a Solution
1500 * 5 = 7500
7500 - 1000 = 6500
6500 is not one of the choices
What now?