# solving with cash flow diagrams and finance calculator, five buttons n, I , PV, PMT, FV

solving with cash flow diagrams and finance calculator, five buttons n, I , PV, PMT, FV.

I need support with this Economics question so I can learn better.

Solve the following problems from the back of our fifth chapter:

5-3

5-13

5-22

5-39

5-59

An anonymous University instructor who teaches a class to engineering students in a small class has decided that raising and lowering the projector screen at the front of the class is a terrible burden. This instructor has asked the universty to purchase an industrial robot to make this task easier. There are two machines under consideration, and your task is to determine the present worth of each of them, and make a recommendation about which is the best option. Assume that universty evaluates investments like this at a rate of 8.7%.

The first machine is a FANUC R-1000iA/80F. This robot will have an initial cost of \$75,075.75 Given the ‘intense’ demands placed upon this robot, we expect it to outlast this instructor, but, we’ll consider this investment over a 35 year time horizon. Since this is a new robot, maintenance costs should be relatively infrequent, we anticipate spending approximately 10% of the purchase price every ten years.

The second option under consideration is a used robot currently listed for sale on ebay.

This is an ABB IRB 1400 M2000 (additional information is available here). It is substantially cheaper; it’s listed for \$4,000.00, but, we think we can purchase it for \$3,888.88. It was originally built in 2003 and has logged a lot of hours, so there’s expected to be substantially more maintenance. During the first year, we anticipate \$1,234.56 in maintenance and operating expenses. Each year thereafter, the maintenance and operating expenses are expected to increase by 13.3% per year.

1. What is the PV for each of these alternatives?
2. Which of them would you recommend?
3. Why did you make that recommendation?

solving with cash flow diagrams and finance calculator, five buttons n, I , PV, PMT, FV