A $40,000 machine will be purchased by a company whose interest rate is 12% APR, compounded daily. The installation cost is$5.000 and disposal costs are insignificant.If needed, use an MARR to 2 decimal places. Algebraic signs matter!EOYMV(N), $O&M, $/yr.years130,000dollars, $10,0002dollars, $24,00013,500b. What is the associated EUAC (TAW) for the ESL?321,00016,000417,500a. Based on the problem data, what is the economic service life, ESL, of the machine?17,000510,00021,000c. If the machine is kept in service to the ESL calculated in part a, what is the TAW for using the machine in EOY 1?

Economic life is that period of time during which an asset remains useful to the average owner.

A $40,000 machine will be purchased by a company whose interest rate is 12% APR, compounded daily. The installation cost is $5.000 and disposal costs are insignificant. If needed, use an MARR to 2 decimal places. Algebraic signs matter! EOY MV(N), $ O&M, $/yr. 1 30,000 years 10,000 2 24,000 13,500 3 21,000 16,000 4 17,500 17,000 5 10,000 21,000 a. Based on the problem data, what is the economic service life, ESL, of the machine?

A $40,000 machine will be purchased by a company whose interest rate is 12% APR, compounded daily. The installation cost is $5.000 and disposal costs are insignificant. If needed, use an MARR to 2 decimal places. Algebraic signs matter! EOY MV(N), $ O&M, $/yr. 1 30,000 years 10,000 2 24,000 13,500 3 21,000 16,000 4 17,500 17,000 5 10,000 21,000 a. Based on the problem data, what is the economic service life, ESL, of the machine?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A $40,000 machine will be purchased by a company whose interest rate is 12% APR, compounded daily. The installation cost is
$5.000 and disposal costs are insignificant.
If needed, use an MARR to 2 decimal places. Algebraic signs matter!
EOY
MV(N), $
O&M, $/yr.
years
1
30,000
dollars, $
10,000
2
dollars, $
24,000
13,500
b. What is the associated EUAC (TAW) for the ESL?
3
21,000
16,000
4
17,500
a. Based on the problem data, what is the economic service life, ESL, of the machine?
17,000
5
10,000
21,000
c. If the machine is kept in service to the ESL calculated in part a, what is the TAW for using the machine in EOY 1?

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