A company purchased a piece of equipment five years ago. A new piece of machinery is being considered for the assembly line because of increasing maintenance costs for this equipment. The cost characteristics of the old equipment and the proposed replacement are shown below: Old Equipment Proposed Replacement Original cost = $18.000 Maintenance = S1000 in year one(four years ago) increasing by $200 per year Market Value(MV) at end of life = 0 Original estimated life = nine years Suppose a $12.000 MV is available now for the old equipment. Perform a before-tax analysis, using a before tax MARR of 12%, with NAW-C or EUAC to determine which alternative to select. Be sure to utilize a uniform gradient in your analysis of the old equipment and account for all cash flows. Purchase cost = $21,000 Maintenance = $250 per year Market Value(MV) at end of life = $5.000 Estimated life = five years

A company purchased a piece of equipment five years ago. A new piece of machinery is being considered for the assembly line because of increasing maintenance costs for this equipment. The cost characteristics of the old equipment and the proposed replacement are shown below: Old Equipment Proposed Replacement Original cost = $18.000 Maintenance = S1000 in year one(four years ago) increasing by $200 per year Market Value(MV) at end of life = 0 Original estimated life = nine years Suppose a $12.000 MV is available now for the old equipment. Perform a before-tax analysis, using a before tax MARR of 12%, with NAW-C or EUAC to determine which alternative to select. Be sure to utilize a uniform gradient in your analysis of the old equipment and account for all cash flows. Purchase cost = $21,000 Maintenance = $250 per year Market Value(MV) at end of life = $5.000 Estimated life = five years

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

XYZ Corporation manufactures book cases that it sells for P65 each. It costs XYZ P35000/year to operate its plant. This sum includes rent, depreciation charges on equipment and salary payments. If the cost to produce one book case is P50, how many case must be sold each year for XYZ to avoid taking loss? Select the correct response: 2334 2336 2335 2333
A manufacturer has been ordered to stop discharging acidic waste into the city sewer. Your analysis shows that the company should choose one of the following systems: System Installed Cost H J $25,000 Your Answer: $35,000 Annual O&M Cost $1,000 in the first year, but grows by 10% each year $500 in the first year, but grows each year by $100 Salvage Value $2,000 $5,000 If the life span of each project is 20 years and interest is assumed to be Y%, which system should be purchased? 4
A machine was bought three years ago for $200,000 with the expected life of 8 years and a salvage value of $20,000. It now can be sold for $100,000. The annual operating cost for this machine over the next five years will be $30,000. A new machine can be purchased for $250,000, a salvage value of $20,000, expected life-of 10 years, and an annual operating cost of $20,000. Should we replace the old machine? MARR= 10%
Plsss answer all
A computerized fabricating system has a first cost of $180,000, and an annual operating cost of $84,000 in years 1 and 2, increasing by $5,000 per year thereafter. The salvage value of the system is 25% of the first cost regardless of when the system is retired within the useful life of 5 years. Using a MARR of 15% per year, determine the annual worth of total cost when keeping the system for 2 years and 4 years.
The beautiful expert Hand written solution is not allowed.
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Required information For equipment that has a first cost of $17,000, the estimated operating costs and year-end salvage values are as shown. Year Operating Cost, $ Salvage Value, $ 1 -1,000 7,000 2 -1,200 5,000 3 -1,300 4,500 4 -2,000 3,000 5 -3,000 2,000 Write the PMT function to determine AW for year 4, if net operating costs are entered into cells B2 through B6. (Please upload your response/solution using the controls below.)
The young and great expert Hand written solution is not allowed
A machine purchased 3 years ago for $140,000 is now too slow to satisfy the demand of the customers. It can be upgraded now for $86,000 or sold to a smaller company internationally for $47,000. The upgraded machine will have an annual operating cost of $92,000 per year and a $37,000 salvage value in 3 years. If upgraded, the presently owned machine will be retained for only 3 more years, then replaced with a machine to be used in the manufacture of several other product lines. The replacement machine, which will serve the company now and for a maximum of 8 years, costs $222,000. Its salvage value will be $57,000 for years 1 through 5; $20,000 after 6 years; and $10,000 thereafter. It will have an estimated operating cost of $45,000 per year. Perform an economic analysis at 9% per year using a specified 3-year planning horizon. a) Determine if the current machine should be replaced now or 3 years from now. b) Once decided, determine the equivalent AW for the next three years. a) The…
An engineering alternative has a first cost of $12700, and is expected to have net annuai receipts of $1650 for the next 8 years. Assuming no salvage value at the end of the alternative's life, the amount of AW(0%) is: 1. c$500.00 2. C-$500.00 3. C-$62.50 4. C $62.50 5. C NONE.
The cost of a embroidery machine is P1.2M and the cost of installation isP50,000. If the salvage value is 10% of the cost of the machine at the end of 10 years,determine the book value at the end of the 3rd year. Use Straight-Line Method. Show complete and logical solution