Answer in step by step with explanation.Don't use Ai and chatgpt. A delivery car had a first cost of $38,000, an annual operating cost of $17,000,and an estimated $4000 salvage value after its 6-year life. Due to aneconomic slowdown, the car will be retained for only 4 years and must besold now as a used vehicle. At an interest rate of 14% per year, what must themarket value of the used vehicle be in order for its AW value to be the sameas the AW if it had been kept for its full life cycle?The market value of the used vehicle is determined to be $

Step 3: Solve for the market value of the car after 4 yearsWe know the total AW for 4 years should…

Answered: A delivery car had a first cost of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A construction firm needs a front-end loader. The loader can be leased from the dealer for 3 years for $8,700 per year including all maintenance, or it can be purchased for $32,000. The firm expects the loader to have a salvage value of $8,500 after 7 years. Maintenance will cost $650 in the first year and increase by $350 each year. The firm's interest rate is 8% per year. Express your answers to the nearest dollar. What is the EUAC for leasing the loader ($/year)? a) b) What is the EUAC for purchasing the loader ($/year)? Which option is preferred (Lease or Buy)?
For equipment that has a first cost of $11,500, the estimated operating costs and year-end salvage values are as shown. Year 1 2345 Operating Cost, $ Salvage Value, $ -1,000 7,000 -1,200 5,000 -1,300 4,500 -2,000 3,000 -3,000 2,000 etermine the economic service life ESL, at /= 10% per year using factors. he economic service life ESL, is years with the AW= $-|
The present worth of the cash flows through year k, PW, for a defender (three-year remaining useful life) and a challenger (five-year useful life) are given in the following table: PW of cash flows through year k, PWK Year Defender Challenger -19640 -15020 2 -27100 -35575 3 -42015 -48120 4 -63000 -87910 Please answer the following questions and attach your handwritten solutions in the next part. Assume that MARR is 10% per year. a) What is the economic service life for both the defender and the challenger, interpret the result based on the ESLS? Answer: b) When should we replace the defender if we use a fixed 5-year planning horizon? Please upload your handwritten answers for both parts here.
An electronics firm invested $50,000 in a precision inspection device. They spend $1500 each year to operate and maintain it. An additional $750 is spent in years 2 and 4 for software updates. At the end of 5 years, the firm changed their inspection procedure, eliminating the need for the device. The purchasing agent was very fortunate to sell the inspection device for $40,000, the original price. Compute the equivalent uniform annual cost during the 5 years the device was used. Assume interest at 10% per year.
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.
The management of Brawn Engineering is considering three alternatives to satisfy an OSHA requirement for safety gates in the machine shop. Each gate will completely satisfy the requirement, so no combinations need to be considered. The first costs, operating costs, and salvage values over a 5-year planning horizon are shown below. End of Year Gate 1 Gate 2 Gate 3 0 -$15,000 -$19,000 -$24,000 1 -$6,500 -$5,600 -$4,000 2 -$6,500 -$5,600 -$4,000 3 -$6,500 -$5,600 -$4,000 4 -$6,500 -$5,600 -$4,000 5 -$6,500 + $0 -$5,600 + $2,000 -$4,000 + $5,000 Show the comparisons and internal rates of return used to make your decision:Comparison 1: (Gate 1 versus Gate 3 or Gate 2 versus Gate 3 or Gate 2 versus Gate 1?) IRR 1: %Comparison 2: (Gate 1 versus Gate 2 or Gate 2 versus Gate 3 or Gate 3 versus Gate 1?) IRR 2: Using an internal rate of return…
The management of Brawn Engineering is considering three alternatives to satisfy an OSHA requirement for safety gates in the machine shop. Each gate will completely satisfy the requirement, so no combinations need to be considered. The first costs, operating costs, and salvage values over a 5-year planning horizon are shown below. End of Year Gate 1 Gate 2 Gate 3 0 -$15,000 -$19,000 -$24,000 1 -$6,500 -$5,600 -$4,000 2 -$6,500 -$5,600 -$4,000 3 -$6,500 -$5,600 -$4,000 4 -$6,500 -$5,600 -$4,000 5 -$6,500 + $0 -$5,600 + $2,000 -$4,000 + $5,000 What is the future worth of each alternative?
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Economics Last year, a decision was made to keep the same equipment in lieu of buying new equipment. The old equipment's trade-in value last year was $4000 and its value this year is $2000. The operating cost was $700 last year. If bought last year, the new equipment would have cost $13K, the salvage value after 8 years would be $2000, and it would have an annual operating cost of $4000. If bought last year, what would have been the EUAC of the new equipment (in dollars) at 16% interest rate per year? (provide your answer in the box as a negative value if you arrive at costs) What would have been the correct decision? (provide your answer and justification in your pdf file submission)
Airodyne Wind, Inc., has wind tunnels that can operate vertically or horizontally for evaluating the effects of air flow on a component's PCB response and reliability. The company expects to build a new tunnel that will be outfitted with multiple sensor ports. For the estimates below, calculate the equivalent annual cost of the project. First Cost Replacement Cost, Year 2 AOC per Year Salvage Value Life, Years Interest Rate The equivalent annual cost of the project is $ $-370,000 $-350,000 $-930,000 $275,000 4 9%
Buying Equipment 1 from XYZ company and company ABC will give the production similar productivity input of 400,000.00 per year. The equipment from company XYZ has a purchase price of 200,000.00, annual maintenance of 5,000.00, and production life of 10 years, while the equipment from company ABC has a purchase price of 100,000.00, annual maintenance of 2,000.00, and production life of 12. Using present worth method, what is the total present worth of each alternatives? Use MARR of 20%

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