9-1. An existing machine with a book value of$10,000 has maintenance costs of $2,000 per year.A new machine costs $25,000 with annual maintenancecosts of $500. When should the existing machine bereplaced? The company's MARR is 15% per year.

Calculate the Annual Equivalent Cost (AEC) of the existing machineGiven:Book value of the existing…

Answered: 9-1. An existing machine with a book…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

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How to get to the answer? Please show full working. Answer should be C) Replacement every 3 years, $130, 364/year. Hand written plz
Show complete solutiion. Do not use excel. Manual Method. Steel drums manufacturer incurs a yearly operating cost of P 200,000. Each drum manufactured cost P 160 and sells for P 300. A machine use for the production has a first cost of P 20,000 and a salvage value of P 2,000 after producing 1,000 units. What is the break even number of units per year?
A manufacturer with a MARR of 20% is considering the installation of one of three packaging machines. The economic parameters of each machine are as follows: Packaging machine: X Y Z Initial cost ($) 20,000 40,000 15,000 Uniform annual benefit ($) 120,000 180,000 100,000 Uniform annual O&M cost ($) 70,000 50,000 70,000 Service life (years) 6 3 12 Salvage value end of life ($) 2,000 4,000 2,000 The present worth (PW) for machine X over the 12 years analysis period is:
A $2500 computer system can be leased for $79 per month for 3 years. After 3 years, it can be purchased for $750. This is also the salvage value if the system was purchased originally. What is the effective annual rate for leasing the computer? Ans. i = 1.75% r= 23.10% Show your ful detailed solutions...
A manufacturer is considering replacing a production machine tool. The new machine, costing $3700, would have a life of 4 years and no salvage value, but would save the firm $500 per year in direct labor costs and $200 per year indirect labor costs. The existing machine tool was purchased 4 years ago at a cost of $4000. It will last 4 more years and will have no salvage value at the end of that time. It could be sold now for $1000 cash.Assume that money is worth 8% and that the difference in taxes, insurance, and so forth, for the two alternatives is negligible. Use an annual cash flow analysis to determine whether the new machine should be purchased.
A potential project is currently under review. An initial investment of 87000 would be necessary for equipment. The annual revenues and expenses are expected to be 40000 and 19000 each year, respectively, over the 6-year project period. The salvage value of the equipment at the end of the project period is projected to be $17000. Assume a MARR of 9%. Find the PW (to the nearest cent).
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9-1. An existing machine with a book value of $10,000 has maintenance costs of $2,000 per year. A new machine costs $25,000 with annual maintenance costs of $500. When should the existing machine be replaced? The company's MARR is 15% per year.