A cookie factory needs a new cookie machine. They have narrowed their choices to the following machines: a b Cost $18000 25000 15000 Annual net savings 1055 2125 1020 IRR 7% 9% 8% Each machine has a 25-year useful life with no salvage value. If the MARR for this factory is 10%, which alternative should be chosen? (Incremental IRR analysis method is required)

A cookie factory needs a new cookie machine. They have narrowed their choices to the following machines: a b Cost $18000 25000 15000 Annual net savings 1055 2125 1020 IRR 7% 9% 8% Each machine has a 25-year useful life with no salvage value. If the MARR for this factory is 10%, which alternative should be chosen? (Incremental IRR analysis method is required)

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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TLC Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently is not equipped to do. Estimates for each machine are as follows: Original cost Estimated life Salvage value Estimated annual cash inflows Estimated annual cash outflows Machine A $78,500 8 years Net present value $ Profitability index 0 $22,200 $4,900 Machine B Machine A Which machine should be purchased? $190,100 Click here to view PV table. Calculate the net present value and profitability index of each machine. Assume a 10% discount rate. (If the net present value is negative, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). For calculation purposes, use 5 decimal places as displayed in the factor table provided, e.g. 1.25124 and final answers to 0 decimal places, e.g. 5,275. Round profitability index answers to 3 decimal places, eg. 12.521.) 8 years Calculate the net present value and…
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The Fence Company is setting up a new production line to create top rails. The relevant data for two alternatives are shown below. Flow Line Manufacturing Cell Installed Cost Expected Life Salvage Value Variable Cost per Top Rail Click here to access the TVM Factor Table Calculator $15,000 5 years $0 $6.00 $10,000 5 years $0 $7.00
As an engineer, you have been asked to recommend a new cooling system for a large warehouse. You have narrowed it down to three different systems with the associated costs shown below If the minimum attractive rate of return in 10%, which system would you recommend. Cooling system A В C $250,000 $75,000 $300,000 $60,000 $36,000 $375,000 $80,000 $45,000 9 years Installation costs Annual operating costs Salvage value Lifespan None 5 years 7 years
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Karabuk casting factory wants to buy a furnace to meet their increasing production demands. As a result of the studies, the data in the table below were found. Based on these data, what will be future value (FV) of the scrap value of alternative B? For Alternative B; Purchase Cost= 12000 Annual Operating Expense= 1700 Scrap Value= 3000 Economic Life= 4 Capital Cost = 10% Ans: 3000
Need help with this please explain step by step how u get the solution
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The Mowbot plant must replace an existing HVAC unit (doing nothing is not an option). You are evaluating two pieces of equipment. Each unit offers a saving in annual energy cost over the existing equipment. Alternative Unit A Unit B Unit C Up front cost $44,000 $65,000 $84,000 Operating cost/year $1.900 $1.400 $900 Energy savings / year $14,000 $16,500 $17,500 Salvage Value $2,000 $4,000 $5,000 Economic life, years 7. 7. Mowbot's MARR is 12%. Based on annual worth analysis (not incremental), which unit should you recommend? HTML Editora BI 工E三 E三xi x ミ = ECE 12pt Paragraph
3- Please solve this question in detail.
Stockton Manufacturing Limited found out that after using only 2 years a machine for semi automation process, a more advanced model is now available in the market. This more advanced model will produce more output with greater efficiency as compare to existing machine. The cost of existing machine is $32,000 with life of 10 years, at the end of which it can be scrapped. The current market value of machine is $15,000 and there is a prospective buyer available to purchase it. The advanced model cost $123,500 with a useful life of 8 years and a scrap value of $20,500 at the end of life. The comparison of the two machines is as follows: EXISTING MACHINE ADVANCED MODEL CAPACITY PER ANNUM 200,000 UNITS 230,000 UNITS SALE PRICE PER UNIT ($) 0.95 0.95 LABOR COST PER UNIT ($) 0.12 0.08 MATERIAL COST PER UNIT ($) 0.48 0.46 FIXED OVERHEADS (ALLOCATION OF PORTION OF COMPANY’S FIXED OVERHEADS) ($) 0.24 0.16 The sales director is of the opinion…

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