A new machine will cost $25,000. The machine is expected to last 4 years and has no salvage value. If the interest rate is 12%, determine the return and the risk associated with the purchase using the Present Worth Analysis technique.

this question os incomplete here is the remaining part of the question

The estimated annual savings and its probability is $7000 at 30%, $8500 at 40%, and $9500 at 30%. Return? Risk?

1.45% return

14.95% risk

Explanation:

12% = 0.12

time = 4 years

2500*0.12 *(1+0.12)⁴/(1+0.12)⁴-1

= 3000x(1.5735)/1.5735-1

= 3000x 2.7437

= 8231.1 per year

Probable annual savings =7000 x 0.3 + 8500 x 0.4 + 9500 x 0.3 = $8350 per year

8350 - 8231.1 =

= 118.9dollars per year

probable return = 118.9/8231.1 * 100

= 1.45%

associated risk

we first calculate minum return,then wecalculate the risk percentage

7000 – 8231.1

-1231.1

1231.1/8231.1

= 0.1495 x100

= 14.95%

answer; it can vividly demonstrate product attributes and persuasively explain their corresponding consumer benefits;

answer; synthetic production system;