A firm is trying to decide between two types of trucks, one a conventional gasoline vehicle and the other a diesel powered. The following information is available. Gasoline $31,000 3 years $8,000 $0.41 Initial investment Useful life Salvage value Operating cost per mile With interest at 4% per year, determine the annual mileage at which the two trucks are equivalent. . For 17,000 miles per year in travel, which truck should be recommended? Click the icon to view the interest and annuity table for discrete compounding when /-4% per year. The annual mileage at which the two trucks are equivalent is miles (Round to the nearest whole number.) Diesel $23,000 2 years $5,000 $0.33

A firm is trying to decide between two types of trucks, one a conventional gasoline vehicle and the other a diesel powered. The following information is available. Gasoline $31,000 3 years $8,000 $0.41 Initial investment Useful life Salvage value Operating cost per mile With interest at 4% per year, determine the annual mileage at which the two trucks are equivalent. . For 17,000 miles per year in travel, which truck should be recommended? Click the icon to view the interest and annuity table for discrete compounding when /-4% per year. The annual mileage at which the two trucks are equivalent is miles (Round to the nearest whole number.) Diesel $23,000 2 years $5,000 $0.33

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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Consider two air-conditioning systems with the cash flow estimates as given below. Use AW analysis to determine the sensitivity of the economic decision to MARR values of 4%, 6%, and 8% per year. Air-Conditioning System 1 System First cost, $ AOC, $ per year Salvage value, $ New compressor and motor cost at midlife, $ Life, years -10,000 -500 -100 -1,850 8 The annual worth of air-conditioning system 1 when the MARR is 4% is $ The annual worth of air-conditioning system 2 when the MARR is 4% is $ The annual worth of air-conditioning system 1 when the MARR is 6% is $ The annual worth of air-conditioning system 2 when the MARR is 6% is $ The annual worth of air-conditioning system 1 when the MARR is 8% is $ The annual worth of air-conditioning system 2 when the MARR is 8% is $ Air-Conditioning System 2 -14,000 -85 -300 -2,540 12
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
A suburban taxi company is considering buying taxis with diesel engines instead of gasoline engines. The cars average 120,000 miles a year. Use EUAC to determine the more economical choice if interest rate is 5%. Diesel Gasoline Vehicle cost $ 24,000.00 $ 19,000.00 Useful life (in years) 5 4 Fuel cost per gallon $ 3.52 $ 3.68 Mileage per gallon 30 25 Annual repairs $ 900.00 $ 700.00 Annual insurance premium $1,000.00 $1,000.00 End of useful life resale value $ 4,000.00 $ 6,000.00 What is value of EUAC for diesel engine? What is the value of EUAC for gasoline engine?
Answer what total relevant cost is for the keep old?
You are to buy a new machine for building a new type of rockets for Wiley Coyote. You have two alternatives, Machine Kaboom and Machine Badaboom. Using Net Present Worth analysis, select the best alternative. Assume an i = 7%. Initial Cost Annual Benefits Annual Costs Life cycle Machine Kaboom -$2,500 $2,000 -$1,200 4 Machine Badaboom -3.740 $2,150 -$1,300 6
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An engineer is considering the purchase of a new set of batteries for an electric pallet jack. Given the cost, annual benefit, useful life, and i = 5%, conduct a net future worth analysis to decide which alternative to purchase.
A replacement electric motor is being considered for purchase. It is capable of providing 200 hp. The pertinent data are follows: Cost - 3200 dollars Maintenance Cost per year - 50 dollars Life expectancy - 14years Salvage value after - 1,429.93 dollars The motor is used for 400 h/year and the cost of electricity is 0.0 dollars/kWh. What is most nearly the effective annual cost using an interest rate of 10%
1. The manager in a canned food processing plant is trying to decide between two labeling machines. Assume an interest rate of 6%. Use annual cash flow analysis to determine which machine should be chosen. First cost Maintenance and operating costs Annual benefit Salvage value Useful life, in years Machine A $15,000 1,600 8,000 3,000 6 Machine B $25,000 400 13,000 6,000 10
What is the annual equivalent cost of purchasing a lift truck that has an initial cost of $85,000, an annual operating cost of $13,500, and an estimated salvage value of $23,000 after six years of use at an annual interest rate of 6%? X More Info Equal Payment Series Single Payment Compound Present Amount Worth Compound Amount Factor (F/A, I, N) Sinking Present Fund Worth Factor Factor Capital Recovery Factor (A/P, i, N) Factor Factor (F/P, i, N) (P/F, i, N) (A/F, i, N) (P/A, i, N) 1.0800 0.9434 1.0000 1.0000 0.9434 1.0800 1.1238 0.8900 2.0800 0.4854 1.8334 0.5454 1.1910 0.8396 3.1836 0.3141 2.6730 0.3741 1.2625 0.7921 4.3746 0.2288 3.4861 0.2886 1.3382 0.7473 5.6371 0.1774 4.2124 0.2374 1.4185 0.7050 6.9753 0.1434 4.9173 0.2034 0.6851 8.3938 0.1191 5.5824 0.1791 1.5038 1.5938 1.6895 0.6274 9.8975 0.1010 6.2098 0.1610 0.5919 11.4913 0.0870 6.8017 0.1470 1.7908 0.5584 13.1808 0.0759 7.3801 0.1359 SAWNIN 1 2 3 4 5 67899 10
A firm is trying to decide between two types of trucks, one a conventional vehicle and the other a diesel-powered vehicle. The following information is available. a-With interest at 4% per year, determine the annual mileage at which the two trucks are equivalent. b-for 20000 miles per year in travel, which truck should be recommended?

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