A firm is choosing between machines that perform the same task in the same time. Assume the minimum attractive return is 7%. Which machine would you choose? Machine X Machine Y $7500 $9250 7 12 $2000 165 First cost Estimated life, in years Salvage value 10 Annual maintenance cost 0

A firm is choosing between machines that perform the same task in the same time. Assume the minimum attractive return is 7%. Which machine would you choose? Machine X Machine Y $7500 $9250 7 12 $2000 165 First cost Estimated life, in years Salvage value 10 Annual maintenance cost 0

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 firm is choosing between machines that perform the same task in
the same time. Assume the minimum attractive return is 7%. Which
machine would you choose?
Machine X Machine Y
First cost
$7500
$9250
Estimated life, in years
7
12
Salvage value
10
$2000
Annual maintenance cost 0
165

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Demand for a new product will decline as competitors enter the market. If interest is 10%, what is an equivalent uniform value?
which process line should be built for a new chemical? the expected market for the chemical is 16 years. an 18% rate is used to evaluate new process facilities, which are compared with present worth. how much does the better choice save? First cost O &M cost/year salvage life A $14 M $2.5 M $2 M 8 years B 22 M 3 M 7.5 M 16 years
1. An industrial plant is considering the purchase of a centrifugal pump. Three offers were received and basis of selection have been tabulated as follows: Offer A Offer B Offer C Price of pump P60,000 P96,000 P120,000 Economic life, years 3 5 10 Salvage value at end of economic life 5,000 10,000 8,000 Yearly maintenance cost 10,000 6,000 5,000 . If cost of money is 14%, what offer would you recommend to be purchased? Use the rate of return method, the annual cost method, present worth method and equivalent uniform annual cost method for the evaluation Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.