Question 1189739
i used the financial calculator at <a href = "" target = "_blank"></a>


first i found out what the annual payment was for 150,000 at 5% for 6 years with a salvage value of 30,000.


those results are shown below:


<img src = "http://theo.x10hosting.com/2022/011803.jpg" >


i then found out what the present value was for 25142.10 annual payment at 5% for 8 years with a salvage value of 40,000.


those result are shown below:


<img src = "http://theo.x10hosting.com/2022/011804.jpg" >


the input for the first analysis was everything except pmt.
the output was pmt.


the input for the second analysis was everything except present value.
the output was present value.


this made both plans equivalent to each other in terms of the annual charges per year.


the interpretation is that buying a piece of equipment for 189,572.32 with an economic life of 8 years and a salvage value of 40,000 is equivalent, in terms of annual charges, to buying a piece of equipment for 150,000 with an economic life of 6 years and a salvage value of 30,000.