12-11) The company is considering two plans, A and B, and is interested in choosing the most economical plan. Plan A consists of two machines, I and II. The Following information is available: Plan B Plan A Machine I Machine II Initial cost 400000 50000 250000 Scrap value Annual Financial Process (CFBT) Annual financial process Annual financial process 50000 10000 150000 5000 100000 200000 5000 100000 250000 5000 50000 Useful life 12 6. 12 Depreciation method is the sum of years figures with a tax rate of 50%. Determine the most economical way if the minimum absorption rate is assumed to be 20%.

12-11) The company is considering two plans, A and B, and is interested in choosing the most economical plan. Plan A consists of two machines, I and II. The Following information is available: Plan B Plan A Machine I Machine II Initial cost 400000 50000 250000 Scrap value Annual Financial Process (CFBT) Annual financial process Annual financial process 50000 10000 150000 5000 100000 200000 5000 100000 250000 5000 50000 Useful life 12 6. 12 Depreciation method is the sum of years figures with a tax rate of 50%. Determine the most economical way if the minimum absorption rate is assumed to be 20%.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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3
A new machine with a purchase price of $87,345, with transportation costs of $8,787, installation costs of $6,059, and special acquisition fees of $2,677, would have a cost basis of a.$93,404 b.$96,081 c.$87,345 d.$104,868+
6) Suppose that you have to decide between three mutually exclusive alternatives regarding the manufacturing techniques of the plant you are working in as an engineer. Following list is given: Technique A (S) | Technique B ($) | Technique C ($) 20,000 7,000 4 First investment (initial cost) Salvage value Operating cost per hour Useful life (year) Here, system A, B, and operates 6, 12, and 20 hours a day, respectively. Assume that each are working 310 days per year. Assuming MARR is 12%, find the followings for each of these alternatives: a) Assuming a very long life for each, capitalized cost (CC)? b) Capital recovery (CR) c) Now suppose that revenue values for all are the same and given by $70,000. Which one would you prefer by using the AW analyses? 40,000 20,000 2 20 30,000 5,000 6 5 4.
9. A local company is analyzing 5 alternatives for a new machine the information is given in the table below. Option Cost Savings per Year Salvage value FV Vehicle life n A -$10,000.00 $ 2,050.00 $ 500.00 B -$12,500.00 $ 3,405.00 -$15,300.00 $ 3,680.00 -$20,500.00 $ 5,281.50 -$30,125.00 $ 6,785.00 C D E $1,000.00 $3,000.00 $ 5,000.00 $5,000.00 5 5 5 5 5 a) which alternative should be selected without considering salvage value? The company is considering a MARR of 7%. b) which alternative should be selected with considering salvage value? The company is considering a MARR of 10%.
2
Smithy Ltd wants to invest in a new machine cooling system. There are three different systems currently in the market: Water-cooled Refrigerant Air-cooled Initial investment 488,000 990,000 1,020,000 Regular maintenance costs per annum 86,000 27,000 80,000 Scheduled major maintenance costs 46,000 72,000 44,000 Energy cost per annum 90,000 60,000 75,000 Other operating cost per annum 107,000 45,000 - Waste per annum 230,000 kilolitres of water* 50 litres of NH3** - Sound tiers (decibels)*** 95 55 85 The water-cooled system and refrigerant system requires a major maintenance at the end of every five years, while the air-cooled system requires a major maintenance at the end of every 10 years. The required rate of return is 10% for all capital investments. Assume a time horizon of 12 years. Ignore tax effects. Required: Calculate the net present value of the three systems. Which option is superior on…
Solve it correctly please. I will rate.
5. Dawg Engineering is considering a new machine for its assembly line, Each choice has a 10 year life. Calculate the IRR for each alternative Initial Cost $132,000.00 $186,000.00 $144,000.00 Annual Benefit $52,000.00 $42,00.00 $56,000.00 Yearly O & M $33,000.00 $12,000.00 $32,000.00 cost Salvage value $15,000.00 $9,000.00 $16,000.00 IRR-A IRR-B IRR-C
Not use Excel
Question atatched
15. Two machines A and B are being considered for use in a small manufacturing plant. Machine A has a first cost of P125 000.00, an estimated life of seven years and a salvage value of P12 500.00. Annual operations and maintenance cost is estimated to be P10 000.00. The corresponding figures of machine B are P175 000.00, seven years, P25 000.00, and P8500.00. Using future worth analysis and an interest rate of 14%, specify which machine should be preferred. (Ans. Select Machine A, - P407.588.51)
solve a,b,c given in the image provided.

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