1. PE 2 Economic Analysis YR 0 YR 1 YR 2 YR 3 YR 4 YR 5 $120,000 $25,800
$8,000
$15,000
($10,000)
YR 0 = 10 machines * $12,000 per machine = $120,000
Recurring end of each year =
Maintenance Contract
= ($15 per month * 12 months per year * 10 machines)
+ ($0.005 per copy * 5,000 copies per month per machine * 12 month per year * 10 machines)=
=$1,800 per year + $3,000 per year = $4,800 per year
Other Operations =
$.035 per copy * 5,000 copies per month per machine * 12 month per year * 10 machines=
= $21,000 per year
Total reoccurring Cost per Year =$4,800 per year + $21,000 per year= $25,800 per year
YR 1 = $800 per machine * 10 machines = $8,000
YR 4 = $1,500 per machine * 10 machines = $15,000
YR 5 = ($1,000) per machine * 10 machines = ($10,000)

2. PE 2 fill out Format A for Alternative 1
$120,000 $0
$120,000
1.000
$120,000 1
$8,000
$25,800
$33,800
0.909
$30,724 2 $0
$25,800
$25,800
0.826
$21,311
PE 2 fill out Format A for Alternative 1 3 $0
$25,800
$25,800
0.751
$19,376 4
$15,000
$25,800
$40,800
0.683
$27,866 5 $0
$25,800
$25,800
0.621
$16,022
$143,000
$129,000
$272,000
3.790
$235,299
$235,299
$62,084
($6,210)
$10,000
0.621
$229,089
$60,446

3. 6. The maintenance is an example of what kind of cost? (circle one)
Non recurring, Sunk cost, Terminal value, Salvage Value, or Recurring Cost
7. The machines can be sold for $1,000 each. This can also be referred to as the: (circle one)
Non recurring, Sunk cost, Terminal value, or Recurring Cost
8. After 4 years, the machines require refurbishment, this is an example of what kind of cost? (circle one)
Non recurring, end cost, Terminal value, or Recurring Cost
9. What is the Uniform Annual cost without terminal value?
10. What is the total discounted annual cost?
b. $62,084
c. $235,299