A commercial 3D printer is purchased for $350,000. The salvage value of the printer decreases by 30% each year that it is held. The cost to operate and maintain the machine the first year it is used is $14,000; these costs increase by $5,000 each year. What is the optimal replacement interval and minimum EUAC for the printer, assuming a MARR of 13% is used? Click here to access the TVM Factor Table Calculator. years ORI: EUAC*: $ Carry all interim calculations to 5 decimal places and then round your final answers to a whole number. The tolerance is ±5 for the EUAC*.

A commercial 3D printer is purchased for $350,000. The salvage value of the printer decreases by 30% each year that it is held. The cost to operate and maintain the machine the first year it is used is $14,000; these costs increase by $5,000 each year. What is the optimal replacement interval and minimum EUAC for the printer, assuming a MARR of 13% is used? Click here to access the TVM Factor Table Calculator. years ORI: EUAC: $ Carry all interim calculations to 5 decimal places and then round your final answers to a whole number. The tolerance is ±5 for the EUAC.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Consider a machine that costs $1000 to purchase. The machine creates an annual operating expense of $500 at the end of first year, which is going to increase by $50 in each year thereafter. The salvage value of this machine is $200, independent of the usage period. Find the economic life of this machine under nominal MARR 25%, compounding annually. A 8. B. 6.
Esquire Company needs to acquire a molding machine to be used in its manufacturing process. Two types of machines that would be appropriate are presently on the market. The company has determined the following: Machine A could be purchased for $22,000. It will last 10 years with annual maintenance costs of $800 per year. After 10 years the machine can be sold for $2,310. Machine B could be purchased for $20,000. It also will last 10 years and will require maintenance costs of $3,200 in year three, $4,000 in year six, and $4,800 in year eight. After 10 years, the machine will have no salvage value. Required: Assume an interest rate of 8% properly reflects the time value of money in this situation and that maintenance costs are paid at the end of each year. Ignore income tax considerations. Calculate the present value of Machine A & Machine B. Which machine Esquire should purchase? Note: Negative amounts should be indicated by a minus sign. Do not round intermediate calculations. Round…
Pierre’s Hair Salon is considering opening a new location in French Lick, California. The cost of building a new salon is $284,000. A new salon will normally generate annual revenues of $60,490, with annual expenses (including depreciation) of $40,800. At the end of 15 years the salon will have a salvage value of $74,000.Calculate the annual rate of return on the project.
A company wants to purchase a piece of equipment that costs $18,000. In 8 years, that same piece of equipment is expected to have a salvage value of $5,000. The estimated annual maintenece cost is $1,000 in the first year, but is expected to increase by $300 each year thereafter. What is the present worth of the project, using a 10% interest rate.
Rakesh
Gardner Denver Company is considering the purchase of a new piece of factory equipment that will cost $360,500 and will generate $100,000 per year for 5 years. Calculate the IRR for this piece of equipment. (Click here to see present value and future value tables) fill in the blank 1%
Consider a machine purchased one year ago for $18,000. The machine is being depreciated $3,000 per year throughout a six-year period. Its current market value is $6,000, and the expected market value of the machine one year from now is $4,000. If the interest rate is 10%, the expected cost of holding the machine during the next year is $___.
The equivalent annual worth of the process currently used in manufacturing motion controllers is AW = $-62,000 per year. A replacement process is under consideration that will have a first cost of $64,000 and an operating cost of $38,000 per year for the next 3 years. Three different engineers have given their opinion about what the salvage value of the new process will be 3 years from now as follows: $10,000, $13,000, and $18,000. Is the decision to replace the process sensitive to the salvage value estimates at the company’s MARR of 15% per year?
GM is setting up a new assembly line for their electric cars. The expected purchase price of the assembly line equipment is $1,200,000, and the estimated operating costs will average $320,000 per year. The expected salvage value in 10 years, is $182,000. The MARR is 20%. Determine the equivalent annual cost of the equipment.
Pierre's Hair Salon is considering opening a new location in French Lick, California. The cost of building a new salon is $270,000. A new salon will normally generate annual revenues of $65,850, with annual expenses (including depreciation) of $39,900. At the end of 15 years the salon will have a salvage value of $76,000. Calculate the annual rate of return on the project. Annual rate of return %
You purchased an industrial oven five years ago for $80,000. O&M costs were $20,000 for this year but are expected to increase by $750 each year for the next five years. The current salvage value of the oven is $40,000 but expected to decrease by 10% in each of the following years of use (e.g. $36,000 after one year, $32,400 after two years, so on). At i = 10%, find the remaining economic life for this asset. A) 1 years B) 2 years C) 3 years D) Answers A, B and C are not correct
A retrofitted space-heating system is being considered for a small office building. The system can be purchased and installed for P11,000,000, and it will save an estimated 300,000 kilowatt-hours (kWh) of electric power each year over a six-year period. A kilowatt-hour of electricity costs P 10, and the company uses a MARR of 15% per year in its economic evaluations of refurbished systems. The market value of the system will be P 80,000 at the end of six years, and additional annual operating and maintenance expenses are negligible. Use the PW method to determine whether this system should be installed. Please show the solution. Solutions in excel is acceptable.