1.) A piece of production equipment is to be replaced immediately because it no longer meets quality requirements for the end product. The two best alternatives are used piece of equipment (A) and a new automated model (B). The economic estimates for each are shown in the accompanying table: A $20,000 $12,000 B $45,000 $23,000 Capital Investment Annual Cash Flow Useful life (years) Market Value 15 $8,000 $9,000 The MARR is 20% year. Which alternative is preferred, based on: a. The co-terminated assumption with study period of 8 years. (Use the imputed market value technique for alternative B using Present Worth method) b. The co-terminated assumption with study period of 15 years. (Use Future Worth method)

Elements Of Electromagnetics
7th Edition
ISBN:9780190698614
Author:Sadiku, Matthew N. O.
Publisher:Sadiku, Matthew N. O.
ChapterMA: Math Assessment
Section: Chapter Questions
Problem 1.1MA
icon
Related questions
Question
Solve manually, excel is not accepted.
1.) A piece of production equipment is to be replaced immediately because it no
longer meets quality requirements for the end product. The two best alternatives are
used piece of equipment (A) and a new automated model (B). The economic
estimates for each are shown in the accompanying table:
A
$20,000
$12,000
$45,000
$23,000
Capital Investment
Annual Cash Flow
Useful life (years)
Market Value
8
15
$8,000
$9,000
The MARR is 20% year. Which alternative is preferred, based on:
a. The co-terminated assumption with study period of 8 years. (Use the imputed
market value technique for alternative B using Present Worth method)
b. The co-terminated assumption with study period of 15 years. (Use Future Worth
method)
Transcribed Image Text:1.) A piece of production equipment is to be replaced immediately because it no longer meets quality requirements for the end product. The two best alternatives are used piece of equipment (A) and a new automated model (B). The economic estimates for each are shown in the accompanying table: A $20,000 $12,000 $45,000 $23,000 Capital Investment Annual Cash Flow Useful life (years) Market Value 8 15 $8,000 $9,000 The MARR is 20% year. Which alternative is preferred, based on: a. The co-terminated assumption with study period of 8 years. (Use the imputed market value technique for alternative B using Present Worth method) b. The co-terminated assumption with study period of 15 years. (Use Future Worth method)
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Mechanical Drawings
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, mechanical-engineering and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
Elements Of Electromagnetics
Elements Of Electromagnetics
Mechanical Engineering
ISBN:
9780190698614
Author:
Sadiku, Matthew N. O.
Publisher:
Oxford University Press
Mechanics of Materials (10th Edition)
Mechanics of Materials (10th Edition)
Mechanical Engineering
ISBN:
9780134319650
Author:
Russell C. Hibbeler
Publisher:
PEARSON
Thermodynamics: An Engineering Approach
Thermodynamics: An Engineering Approach
Mechanical Engineering
ISBN:
9781259822674
Author:
Yunus A. Cengel Dr., Michael A. Boles
Publisher:
McGraw-Hill Education
Control Systems Engineering
Control Systems Engineering
Mechanical Engineering
ISBN:
9781118170519
Author:
Norman S. Nise
Publisher:
WILEY
Mechanics of Materials (MindTap Course List)
Mechanics of Materials (MindTap Course List)
Mechanical Engineering
ISBN:
9781337093347
Author:
Barry J. Goodno, James M. Gere
Publisher:
Cengage Learning
Engineering Mechanics: Statics
Engineering Mechanics: Statics
Mechanical Engineering
ISBN:
9781118807330
Author:
James L. Meriam, L. G. Kraige, J. N. Bolton
Publisher:
WILEY