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Present Worth for Initial Replacement Formula

GoPresent Worth with Salvage Value of Equipment at 2nd Year Investment Formula

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Present Worth is a financial metric that represents the current value of a series of future cash flows, considering the time value of money. Check FAQs

P worth = (\frac{C R}{{(1 + i r)}^{n} - 1})

P_worth - Present Worth?C_R - Replacement Cost?i_r - Interest Rate per Period?n - Number of Interest Periods?

Present Worth for Initial Replacement Example

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Here is how the Present Worth for Initial Replacement equation looks like with Values.

Here is how the Present Worth for Initial Replacement equation looks like with Units.

Here is how the Present Worth for Initial Replacement equation looks like.

566343.0421 = (\frac{70000}{{(1 + 0.06)}^{2} - 1})

566343.0421 = (\frac{70000}{{(1 + 0.06)}^{2} - 1})

566343.0421 = (\frac{70000}{{(1 + 0.06)}^{2} - 1})

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Present Worth for Initial Replacement Solution

Follow our step by step solution on how to calculate Present Worth for Initial Replacement?

FIRST Step Consider the formula

P worth = (\frac{C R}{{(1 + i r)}^{n} - 1})

Next Step Substitute values of Variables

∴

P worth = (\frac{70000}{{(1 + 0.06)}^{2} - 1})

Next Step Prepare to Evaluate

∴

P worth = (\frac{70000}{{(1 + 0.06)}^{2} - 1})

Next Step Evaluate

∴

P worth = 566343.042071197

LAST Step Rounding Answer

∴

P worth = 566343.0421

Present Worth for Initial Replacement Formula Elements

Variables

Present Worth

Present Worth is a financial metric that represents the current value of a series of future cash flows, considering the time value of money.

Symbol: P_worth

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Present Worth

Replacement Cost

Replacement costs refer to the estimated expenses or expenditures required to replace an existing asset or item with a new one of similar functionality, condition, and capacity.

Symbol: C_R

Measurement: NAUnit: Unitless

Note: Value can be positive or negative.

Formulas to find Replacement Cost

Interest Rate per Period

Interest Rate per Period represents the rate at which interest is charged or earned within a specific time frame.

Symbol: i_r

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Interest Rate per Period

Number of Interest Periods

The number of interest periods, often denoted as n, represents the total count of compounding periods within a specified time frame for an investment or loan.

Symbol: n

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Number of Interest Periods

Other Formulas to find Present Worth

Go Present Worth with Salvage Value of Equipment at 2nd Year Investment

P worth = PE - \frac{A}{1 + i r} - \frac{A}{{(1 + i r)}^{2}} + V s

Other formulas in Interest and Investment Costs category

Go Capitalized Cost

K = V + (\frac{C R}{{(1 + i)}^{n} - 1})

Go Future Worth of Annuity

F = A \cdot (\frac{{(1 + i)}^{n} - 1}{i})

Go Future Worth of Annuity given Present Annuity

F = P \cdot ({(1 + i)}^{n})

Go Future Worth of Perpetuity

F P = A \cdot (\frac{{(1 + i)}^{n} - 1}{(i)})

How to Evaluate Present Worth for Initial Replacement?

Present Worth for Initial Replacement evaluator uses Present Worth = (Replacement Cost/((1+Interest Rate per Period)^(Number of Interest Periods)-1)) to evaluate the Present Worth, Present Worth for Initial Replacement is a financial metric used to evaluate the economic feasibility of replacing an existing asset with a new one. Present Worth is denoted by P_worth symbol.

How to evaluate Present Worth for Initial Replacement using this online evaluator? To use this online evaluator for Present Worth for Initial Replacement, enter Replacement Cost (C_R), Interest Rate per Period (i_r) & Number of Interest Periods (n) and hit the calculate button.

FAQs on Present Worth for Initial Replacement

What is the formula to find Present Worth for Initial Replacement?

The formula of Present Worth for Initial Replacement is expressed as Present Worth = (Replacement Cost/((1+Interest Rate per Period)^(Number of Interest Periods)-1)). Here is an example- 566343 = (70000/((1+0.06)^(2)-1)).

How to calculate Present Worth for Initial Replacement?

With Replacement Cost (C_R), Interest Rate per Period (i_r) & Number of Interest Periods (n) we can find Present Worth for Initial Replacement using the formula - Present Worth = (Replacement Cost/((1+Interest Rate per Period)^(Number of Interest Periods)-1)).

What are the other ways to Calculate Present Worth?

Here are the different ways to Calculate Present Worth-

Present Worth=Purchase Cost of Equipment-(Annuity)/(1+Interest Rate per Period)-(Annuity)/(1+Interest Rate per Period)^(2)+Salvage Value of Equipment

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Present Worth for Initial Replacement Formula

​GoPresent Worth with Salvage Value of Equipment at 2nd Year Investment Formula

Present Worth for Initial Replacement Example

Present Worth for Initial Replacement Solution

Present Worth for Initial Replacement Formula Elements

Other Formulas to find Present Worth

Other formulas in Interest and Investment Costs category

How to Evaluate Present Worth for Initial Replacement?

FAQs on Present Worth for Initial Replacement

Variable Name

GoPresent Worth with Salvage Value of Equipment at 2nd Year Investment Formula