(E6) Hello! Please help me answer this one. Please refer to the given picture/s below for the questions. Please read the instructions and directions very carefully. Double and triple check your answers, previous tutors got it wrong. NOTE: Type only your answers. Please do not handwritten your answers. Make sure your formulas, solutions and answers' format are all correct. Answer no 1 only! 1. Choose from the two machines which is more economical.Machine AFirst CostP8,000.00Salvage ValueAnnual Operation3,000Annual Maintenance1,200Taxes and Insurance3%Life Years10Money is worth at least 16%. Prove your answer using three methods.2. A chemical plant needs a generating set. After evaluating several offers, the choice wasnarrowed down to two offers a Diesel engine and a gasoline engine. The EngineeringStaff made estimate of life salvage value, operating cost and maintenance cost asfollows:Diesel EngineGasoline EnginePurchase PriceP360,000P205,000Annual Fuel Cost40,00060,000Maintenance Cost10,00015,000Salvage Value30,0005,000Life Years128Using the cost of money as 10% and using the straight-line depreciation, calculate the totalannual cost for each generating set. Which is preferable? Explain the answer usimg Rate ofReturn Method.Machine BP14,000.002,0002,4001,0003%15

As per student request, I will answering questions no 1. Thank you…

Answered: 1. Choose from the two machines which…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Question

(E6) Hello! Please help me answer this one. Please refer to the given picture/s below for the questions. Please read the instructions and directions very carefully. Double and triple check your answers, previous tutors got it wrong.

NOTE: Type only your answers. Please do not handwritten your answers. Make sure your formulas, solutions and answers' format are all correct.

Answer no 1 only!

1. Choose from the two machines which is more economical.
Machine A
First Cost
P8,000.00
Salvage Value
Annual Operation
3,000
Annual Maintenance
1,200
Taxes and Insurance
3%
Life Years
10
Money is worth at least 16%. Prove your answer using three methods.
2. A chemical plant needs a generating set. After evaluating several offers, the choice was
narrowed down to two offers a Diesel engine and a gasoline engine. The Engineering
Staff made estimate of life salvage value, operating cost and maintenance cost as
follows:
Diesel Engine
Gasoline Engine
Purchase Price
P360,000
P205,000
Annual Fuel Cost
40,000
60,000
Maintenance Cost
10,000
15,000
Salvage Value
30,000
5,000
Life Years
12
8
Using the cost of money as 10% and using the straight-line depreciation, calculate the total
annual cost for each generating set. Which is preferable? Explain the answer usimg Rate of
Return Method.
Machine B
P14,000.00
2,000
2,400
1,000
3%
15

Expert Solution

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions