. The estimated useful life of the concrete building is 60 years with no nee ir cost for the first ten years of the building's age, while the repair cost fo r years is $1,000 a year. The estimated age of the steel building is 20 year epair cost of $1,150 a year. The salvage value of the concrete building an ilding is $40,000 and $6,000, respectively. If the interest rate is 10%, whic s more economic for the company? (Hint: to perform a comparison you nee he annual equivalent of the uniform payment series).

. The estimated useful life of the concrete building is 60 years with no nee ir cost for the first ten years of the building's age, while the repair cost fo r years is $1,000 a year. The estimated age of the steel building is 20 year epair cost of $1,150 a year. The salvage value of the concrete building an ilding is $40,000 and $6,000, respectively. If the interest rate is 10%, whic s more economic for the company? (Hint: to perform a comparison you nee he annual equivalent of the uniform payment series).

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

6
ECLO-51 An airways company plans to invest now in order to be able replace aging airorat that wil be deivered 5 years from wo much w th compeny net to t nw the cost of replacing the aging aireraft is S30 million and the companys interest rate i o per yeart O s3.736.500 O 137.365.000 O SIL626.000 sU6.260.000
Economics A new machine can be purchasedfor$80,000. Its expecteduseful life is 5 years, at which time its market value will be $6,000. Annual revenues less expenses dueto the new machine will be $20,000 per year overthefive-year period. Assume a MARR of 10% to determine if this is a good investment by using. a) the PW method b)the FW method c) the AW method d) The IRR method e) The ERR method
Mr Dela Cruz is going to buy a new machine for manufacturing its product: Machine A has a first cost of P50,000; annual maintenance P6,000; life 12 years and salvage value of P2,000. Machine B has a first cost of P140,000; annual maintenance P2,500, life 36 years and salvage value P10,000. Money is worth 9% .Compute the annual cost of machine B choices: A. P551 B. P2,500 C. P15,651 D. P7,550 COMPELETE SOLUTION
Please answer these two question with proper solution and write it on a paper Thank you.
27) For the following alternatives, (a) find the maximum cost you can spend on alternative A to break even with alternative B if the interest rate is 10% per year. (b) repeat A following expected lives, 5, 8, 10, 12, 15 years using Spreadsheet and Goal seek tool.
Littrell's Nursery needs a new irrigation system. System one will cost $145,000, have annual maintenance costs of $10,000, and need an overhaul at the end of year six costing $30,000. System two will have first year maintenance costs of $5,000 with increases of $500 each year thereafter. System two would not require an overhaul. Both systems will have no salvage value after 12 years. If Littrell's cost of capital is 4%, using annual worth analysis determine the maximum Littrell's should be willing to pay for system two.
110 0 Le000 & (0) A 200 B 3000 2000 らoo0 2800 5000 9f MARR=SI. MARR=81. O x & Y ? MARR = 101 Initial Cost Annual benefit 95|120 Sal vage Value 50 150 use bul libe DO Nothinglon) 3. 200 700 6 yean 12yng
Sit Consider the following three alternatives. There is also a "do nothing" alternative. At the end of the 5-year useful life of A, a replacement is not made. If a 10-year analysis period and a 2% interest rate are selected, which is the preferred alternative? A B $50 $40 $30 4.5 Cost Net annual bene fit Useful life, in years 12 5 10 10
The first cost of a fairly large flood control dam is expected to be $5 million. The maintenance cost will be $60,000 per year, and a $100,000 outlay will be required every 5 years. At interest of 10%, find the EUAC of the dam project.
2. 4.2 Calculate the value of X that makes the two alternatives equally desirable if the MARR is 9%. Hint: the two alternatives' NPV should be the same. A B Cost 70000 53000 Uniform Annual Benefit 3200 X Salvage Value 26700 16600 Useful Life, in years 8 7
Hh.207.