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Math Help - EAC of Corvette vs Mustang

  1. #1
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    Question EAC of Corvette vs Mustang

    \text{For Reference: }

    P = \text{Present Worth}

    F = \text{Future Worth}

    A = \text{Annuity}

    \text{Example of using the mnemomic expressions is below, }

    (\frac{A}{P}, i\%,N) \equiv \text{ A constant that when multiplied with the present worth, will provide the equivalent annuity over N peroids given a discount rate of i}\%

    \text{Similiarly for the other mnemomic expressions.}

    See figure attached for problem statement.

    See 2nd figure in 2nd post for my attempt at the problem.
    Attached Thumbnails Attached Thumbnails EAC of Corvette vs Mustang-q-_0113_0001.jpg  
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  2. #2
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    Re: EAC of Corvette vs Mustang

    My attempt at the problem is attached below. Are there any mistakes? My strategy for the mustangs was to pull all the costs and salvage values back to present worth terms and then annuitize(is that a word?) everything over the 10 year peroid.
    Attached Thumbnails Attached Thumbnails EAC of Corvette vs Mustang-q-_0114.jpg  
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  3. #3
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    Question Re: EAC of Corvette vs Mustang

    Still looking for help on this one, I am finding the scenario in the question very confusing.

    Here is another attempt at the EAC of the mustang.

    For this attempt the approach I took was to calculate the present worth of all costs/salvages over the 10 year peroid and then amortize them over the 10 years as a yearly annuity.

    Is this attempt correct?
    Attached Thumbnails Attached Thumbnails EAC of Corvette vs Mustang-eacmat.jpg  
    Last edited by jegues; October 12th 2012 at 07:13 PM.
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