3. Grade Motor Co. is considering two different makes of blow molding machine for one of its automotive products. The cost data for the two alternatives are provided in table below. MARR = 12. Using IRR analysis, state which equipment should be bought. Use 12% as the initial guess for IRR. Initial cost Annual operating cost Benefits/Year Salvage value It ifa Equipment XEquipment Y $160K $285K 45K 90K 20K 10 Years 45K 105K 40K

3. Grade Motor Co. is considering two different makes of blow molding machine for one of its automotive products. The cost data for the two alternatives are provided in table below. MARR = 12. Using IRR analysis, state which equipment should be bought. Use 12% as the initial guess for IRR. Initial cost Annual operating cost Benefits/Year Salvage value It ifa Equipment XEquipment Y $160K $285K 45K 90K 20K 10 Years 45K 105K 40K

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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An engineer is considering the purchase of a new set of batteries for an electric pallet jack. Given the cost, annual benefit, useful life, and i = 5%, conduct a net future worth analysis to decide which alternative to purchase.
The Mowbot plant must replace an existing HVAC unit (doing nothing is not an option). You are evaluating two pieces of equipment. Each unit offers a saving in annual energy cost over the existing equipment. Alternative Unit A Unit B Unit C Up front cost $44,000 $65,000 $84,000 Operating cost/year $1.900 $1.400 $900 Energy savings / year $14,000 $16,500 $17,500 Salvage Value $2,000 $4,000 $5,000 Economic life, years 7. 7. Mowbot's MARR is 12%. Based on annual worth analysis (not incremental), which unit should you recommend? HTML Editora BI 工E三 E三xi x ミ = ECE 12pt Paragraph
The following three alternatives have been developed and costed to improve the efficiency of aircraft engines. Compare the alternatives using capitalized cost and a MARR of 10% per year compounded annually. Alternative Alternative Alternative G First Cost, $ -1,000,000 -3,000,000 -5,000,000 Net income $ per year 325 000 400,000 600,000 Salvage value, S 50,000 70,000 Life, years 4 8.
1. The manager in a canned food processing plant is trying to decide between two labeling machines. Assume an interest rate of 6%. Use annual cash flow analysis to determine which machine should be chosen. First cost Maintenance and operating costs Annual benefit Salvage value Useful life, in years Machine A $15,000 1,600 8,000 3,000 6 Machine B $25,000 400 13,000 6,000 10
A firm has two alternatives for the improvement of its current production system. The data are as follows: Machine A Machine B First Cost - P6M First cost-P8968578 Annual operating cost-P250T Annual operating cost - P294445 Service life - 6 years Service life - 4 years Salvage value - P150T Salvage value - P142107 Using the Present Value (PV) Method and with the firm's interest rate of 23% cpd. annually, what the PV of Machine B?
3
Yıldız Processing Technologies Company wants to buy lathe in order to meet their increasing production needs. As a result of the studies, the data in the table below were found. Based on these data, what will be future value (FV) of the annual operating expense of alternative A? For Alternative A; Purchase Cost= 10000 Annual Operating Expense= 3000 Scrap Value= 2000 Economic Life= 4 Capital Cost = 10%
A manufacturer of automated optical inspection devices is deciding on a project to increase the productivity of the manufacturing processes. The estimated costs for the two feasible alternatives being compared are shown below. Use the internal rate of return (IRR) method to determine which alternative should be selected if the analysis period is 8 years and the company's MARR is 4% per year. Alternative M N Initial costs $30,000 $45,000 Net annual cash flow $4,500 $7,000 Life in years 8 8 (a) IRR of base alternative = (b) IRR of incremental cash flow = (c) Choose Alternative
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. A construction company must replace a piece of heavy earth-moving equipment. Cat and Volvo are the two best alternatives. Both alternatives are expected to last 8 years. If the company has a minimum attractive rate of return (MARR) of 11%, which alternative should be chosen? Use IRR analysis. Cat Volvo First cost $15,000 $22,500 Annual operating cost Salvage value 3,000 1,500 2,000 4,000
Solve it correctly please. I will rate.
Not use Excel

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