6. A construction firm can achieve a $15,000 cost savings in Year-1 and increased by $2,000 each year for the next 5 years by converting their diesel engines for biodiesel fuel. At an interest rate of 15%, what is the equivalent annual worth (A) of the savings? [4]
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![6. A construction firm can achieve a $15,000 cost
savings in Year-1 and increased by $2,000 each
year for the next 5 years by converting their diesel
engines for biodiesel fuel. At an interest rate of
15%, what is the equivalent annual worth (A) of the
savings? [4]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Febd57753-77a2-4d5e-8b8e-ab91d7ce9926%2F69c9d0d3-e8cc-4c17-b315-8e861c3661b3%2F6ppncjk_processed.jpeg&w=3840&q=75)
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- 1. What is the future worth 6 years from now of a present cost of P175,000 to Corning, Inc. at an interest rate of 10% per year?8A construction firm needs a new small loader. It can be purchased for $20,000. The firm expects the loader to have a salvage value of $6,000 after 7 years. The maintenance cost will be $1,400 each year. The firm's interest rate is 1% per year. Compute the Equivalent Uniform Annual Worth (EUAW).
- Consider a machine that costs P20,000 and has a five years useful life. At the end of the five years, it can be sold for P4,000 after tax adjustment. The annual operating and maintenance (O&M) costs are about P50o. If the firm could earn an after-tax revenue of P5,000 per year with this machine, should it be purchased at an interest rate of 10%?A company is considering an investment that will cost $759,000 and have a useful life of 6 years. The cash flows from the project are expected to be $450,000 per year in the first two years then $170,000 per year for the last 4 years. If the appropriate discount rate is 16.0 percent per annum, what is the NPV of this investment (to the nearest dollar)? Select one: O a. $316870 O b. $321617 O c. $1834870 O d. $439045A construction firm can achieve a $15,000 cost savings in Year 1, increasing by $3000 each year for the next 5 years, by converting their diesel engines for biodiesel fuel. At an interest rate of 15%, what is the equivalent annual worth of the savings?
- • EXAMPLE: A new machine will be purchased for 150000 TL and sold for 30000 TL at the end of 5 years. An annual income of 75000 TL will be provided. Expected rate of return on investment • 40% Determine annual depreciation amount Analyze the pre-tax economics of the investment If • the income tax rate is 25%, analyze the after-tax economics of the investment13. ABC manufacturing wants to purchase a new machine that is expected to save $12,000 in annual operating and maintenance costs for the next five years. The machine's price is $32,000, and the installation cost is $3500. With a salvage value of $5,000 and an interest rate of 17%, what is the discounted payback period? a. 4 years b. 6 уears с. 5 years d. 3 yearsQ3. You have purchased a machine costing $40 000. The machine will be used for two years, and at the end of this time, its salvage value is expected to be $20 000. The machine will be used 6 000 hours during the first year and 8 000 hours during the second year. The expected annual net savings will be $45 000 during the first year and $52 000 during the second year. If your interest rate is 12%, what would be the equivalent net savings per machine hour? (Hint: Calculate Capital recovery cost and then net annual saving and finally equivalent net savings per machine hour.)
- 7. What is the minimum interest rate of a company should accept, if it is support and finance an energy saving program that saves P20,000.00 per year over its useful life of 10 years, if the initial cost is P112,000.00? a. 10% b. 12 % c. 17% d. 20%4.55 The maintenance cost for furnaces at a copper smelting plant have been constant at $140,000 per year for the past 5 years. If the interest rate was 8% per year for the first 3 years and then it increased to 10% in years 4 and 5, what is the equivalent future worth (in year 5) of the maintenance cost?E1
