A finishing machine was bought for your textile plant at a price of $500,000 in the year 2014. The reference size of the machine was 180 yd/min. The plant is planning to buy a similar machine in the year 2021 having a size of 520 yd/min. Assume that the cost-capacity factor is 0.65. Estimate the cost of the machine if the index for this type of machines has had a compound increase of 7.5% per year.

ENGR.ECONOMIC ANALYSIS
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Author:NEWNAN
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Chapter1: Making Economics Decisions
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A finishing machine was bought for your textile plant at a price of $500,000
in the year 2014. The reference size of the machine was 180 yd/min. The plant is planning
to buy a similar machine in the year 2021 having a size of 520 yd/min. Assume that the
cost-capacity factor is 0.65. Estimate the cost of the machine if the index for this type of
machines has had a compound increase of 7.5% per year.
Transcribed Image Text:A finishing machine was bought for your textile plant at a price of $500,000 in the year 2014. The reference size of the machine was 180 yd/min. The plant is planning to buy a similar machine in the year 2021 having a size of 520 yd/min. Assume that the cost-capacity factor is 0.65. Estimate the cost of the machine if the index for this type of machines has had a compound increase of 7.5% per year.
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