1. PE 4 Economic Analysis alternative 1 - BUY
YR 0
YR 1
YR 2
YR 3
YR 4
YR 5
YR 6
YR 7
$40,000
$50,080
$50,080
$50,080
$50,080
$50,080
$50,080
$50,080
$800
(-$16,000)
YR 0 = 8 machines * $5,000 per machine = $40,000
Recurring end of each year =
Annual Paper Usage = $0.04 per sheet * 12,000 copies per month per machine * 12 months per year * 8 machines= $46,080 per year
Annual Maintenance = $4,000 per year
Total reoccurring Cost per Year =$46,080 per year + $4,000 per year= $50,080 per year
YR 4 = $100 per machine * 8 machines = $800
YR 5 = (-$2,000) per machine * 8 machines = (-$16,000)

2. ALTERNATIVE 1

3. PE 4 Economic Analysis alternative 2- LEASE
YR 0
YR 1
YR 2
YR 3
YR 4
YR 5
YR 6
YR 7
$300
$61,600
$61,600
$61,600
$61,600
$61,600
$61,600
$61,600
YR 0 = $300 special training = $300
Recurring end of each year =
Lease= $500 per machine * 8 machines = $4,000 per year
Annual Paper Usage = $0.05 per sheet * 12,000 copies per month per machine * 12 months per year * 8 machines= $57,600 per year
Total reoccurring Cost per Year =$4,000 per year + $57,600 per year= $61,600 per year

4. ALTERNATIVE 2

5. 5. Which alternative would you recommend & why?
6. The maintenance in Alternative 1 is an example of what kind of cost? (circle one)
Non recurring, Sunk cost, Salvage value, or Recurring Cost
7. In Alternative 1 The machines can be sold for $2,000 each. This can also be referred to as the: (circle one)   
Non recurring, end cost, Terminal value, or Recurring Cost
8. Alternative 2 requires special training, this is an example of what kind of cost? (circle one)
Cost-to-be-the-Boss end cost, Terminal value, Recurring Cost, or Non recurring,
9. What is the Uniform Annual cost without terminal value for Alternative 2?
10. What is the total discounted annual cost for Alternative 1?
11. What is the Uniform Annual cost with terminal value for Alternative 2?
ALT 1- Lowest Net Total Project Cost (discounted)
a. $61,662
c. $284,286
a. $61,662