Future and Annual Worth Analysis - Examples & Applications

Future Worth Analysis

A company is considering investing $50,000 in a new software system that will save$ 15,000 per year for 5 years. At the end of 5 years, the software will have zero salvage value. If the MARR is 10%, determine the Future Worth of this investment.

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Annual Worth Analysis (Different Lives)

Compare two pump alternatives using AW analysis at a MARR of 8%.

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Pump A: Initial cost = $\$ 10,000 $, Annual operating cost =$ $2,000 $, Salvage =$ $1,000 $, Life = 4 years.</li> <li>Pump B: Initial cost =$ $15,000 $, Annual operating cost =$ $1,000 $, Salvage =$ $2,000$, Life = 6 years.

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