A company that sells has proposed to a small public utility company that it purchase a small electronics computer for $1,000,000 to replace ten calculating machines and their operators. An annual service maintenance contract for the computer will be provided at a cost of $100, 000 per year. One operator will be required at a salary of $110, 000 per year and one programmer at a salary of $160, 000. The estimated economical life of the computer is 10 years. The calculating machines costs $8,000 each when new, 5 years ago, and presently can be sold for $2,000 each. They have an estimated life of 8 years and an expected ultimate trade in value of $1, 000 each. Each calculating machine operator receives $85, 000 per year. Fringe Benefits for all labour cost 8% of annual salary. Annual maintenance cost on the calculating machine has been $500 each. Taxes and insurance on all equipment is 2% of the first cost per year. If capital costs the company about 25%, would you recommend the computer installation?

A company that sells has proposed to a small public utility company that it purchase a small electronics computer for $1,000,000 to replace ten calculating machines and their operators. An annual service maintenance contract for the computer will be provided at a cost of $100, 000 per year. One operator will be required at a salary of $110, 000 per year and one programmer at a salary of $160, 000. The estimated economical life of the computer is 10 years. The calculating machines costs $8,000 each when new, 5 years ago, and presently can be sold for $2,000 each. They have an estimated life of 8 years and an expected ultimate trade in value of $1, 000 each. Each calculating machine operator receives $85, 000 per year. Fringe Benefits for all labour cost 8% of annual salary. Annual maintenance cost on the calculating machine has been $500 each. Taxes and insurance on all equipment is 2% of the first cost per year. If capital costs the company about 25%, would you recommend the computer installation?

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

d. Calculate the rate of utilization of each option?e. Considering the information calculated, which option is best in your opinion? Is there a third option you could implement?
You are trying to pick the least expensive car for your new delivery service. You have two choices: the Scion XA, which will cost $13000 to purchase and which will have a OCF of -$1,200 annually throughout the vehicle's expected life of three years as a delivery vehicle; and the Toyota Prius, which will cost $23,000 to purchase and which have a OCT of -$500 annually throughout the vehicle's expected 5-years life. Both cars will be worthless at the end of thier life. If you intend to replace whichever type of car you choose with the same thing when its life runs out, again and again out into foreseeable future, and if your business has a cost of capital of 12 percent, what is the difference in the EAC of the two cars?
just need help with d and e Speak
Product X currently sells for $12 per unit. The variable costs is $4 per unit and 10,000 units are sold annually with a profit of $30,000 per year. A new design will increase the variable cost by 24% and fixed cost by 13% but sales will increase to 12490 units per year. At what selling price do the break even occurs for the new design? complete solution needed
Product X currently sells for $12 per unit. The variable costs is $4 per unit and 10,000 units are sold annually with a profit of $30,000 per year. A new design will increase the variable cost by 21% and fixed cost by 11% but sales will increase to 12777 units per year. At what selling price do the break even occurs for the new design?
Show full work, no excel please
A certain firm has a capacity to produce 650,000 units of a certain product per year. At present, it is operation at 62% capacity. The firm's annual income is ₱4,160,000. Annual fixed cost is ₱1,920,000 and the variable cost are equal to ₱3.56 per unit. What is the annual profit or loss?
A diesel engine uses a Type A filter and high-grade lubricating oil costing $5.50 per liter. With this filter, the oil and filter have to be changed every 500 hours of operation, and 5 liters of oil have to be added every 100 hours. This filter cost $148 a piece.Eighty liters of oil fill the engine. Another type, filter B, costing $120 may be used with a lower grade oil costing $4.80 per liter. However, if this filter is used, the oil andfilter have to be changed every 300 hours, and 10 liters are added after every 150 hours the engine is used. Which type of filter and oil would you recommend? Kindly show your complete solutions. Thank you
the The fixed costs at Mahi consulting company are $120,000 annually. The annual revenue is $3,000 per client and each client has a $500 variahl cost. Find the breakeven point per year and the annual profit/loss if 408 60 clients have are serviced next year.
A jewelry firm buys semiprecious stones to make bracelets and rings The supplier quotes a price of S8.30 per stone for quantities of 600 stones or more, S8.70 per stone for orders of 400 to 599 stones, and $0.20 per stone for lesser quantities The jewelry firm operates 102 days per yea. Usage rate is 20 stones per day, and ordering costs are 540. The carrying cost is $3 per year for each stone 1) What is the candidate order quantty at the unit price of 50 207 (Round your answer to the nearest whole number) 2) What is the candidate order quantity at the unit price of $0.707 (Round your ansewer to the nearest whole number) 3) What is the candidate order quantity at the unit price of $8.307 (Round your answer to the nearest whole number.) 4) What order quantity is optimal the intent in to mnimize total annual conts? Round nteredmate calcuations to the nearest whole numbers before compuling the conesponding total annual costs (Round your answer to the nearest whole number 5) What is the…
Chambers Company has just gathered estimates forconducting a break-even analysis for a new product.Variable costs are $7 a unit. The additional plant willcost $48,000. The new product will be charged $18,000a year for its share of general overhead. Advertisingexpenditures will be $80,000, and $55,000 will be spenton distribution. If the product sells for $12, what is thebreak even point in units? What is the break even pointin dollar sales volume?
What effective steps should be taken by Engineers that will enable the firm todesign and manufacture products economically?