A granary has two options for a conveyor used in the manufacture of grain for transporting, filling, or emptying One conveyor can be purchased and installed for $95,000 with $1.500 salvage value after 16 years. The other can be purchased and installed for $95.000 with $2,500 salvage value after 16 years. Operation and maintenance for each is expected to be $15,000 and $15.500 per year. respectively. The granary uses MACR6-GDS depreciation, has a marginal tax rate of 25%, and has a MARR of 9% after taxes. Click here to access the TVM Factor Table Calculator Click here to access the MACRS-GDS table.

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 granary has two options for a conveyor used in the manufacture of grain for transporting, filling or emptying. One conveyor can be
purchased and installed for $95,000 with $1.500 salvage value after 16 years. The other can be purchased and installed for $95.000
with $2,500 salvage value after 16 years. Operation and maintenance for each is expected to be $15.000 and $15,500 per year.
respectively. The granary uses MACR6-GDS depreciation, has a marginal tax rate of 25%, and has a MARR of 9% after taxes.
Click here to access the TVM Factor Table Calculator
Click here to access the MACRS-GDS table.
Parta
Your answer is correct.
Determine which alternative is less costly, based upon comparison of after-tax annual worth. Alternative 1:
Show the AW values used to make your decision
Conveyor 1:5
Conveyor 2: S
20704
21056
Transcribed Image Text:A granary has two options for a conveyor used in the manufacture of grain for transporting, filling or emptying. One conveyor can be purchased and installed for $95,000 with $1.500 salvage value after 16 years. The other can be purchased and installed for $95.000 with $2,500 salvage value after 16 years. Operation and maintenance for each is expected to be $15.000 and $15,500 per year. respectively. The granary uses MACR6-GDS depreciation, has a marginal tax rate of 25%, and has a MARR of 9% after taxes. Click here to access the TVM Factor Table Calculator Click here to access the MACRS-GDS table. Parta Your answer is correct. Determine which alternative is less costly, based upon comparison of after-tax annual worth. Alternative 1: Show the AW values used to make your decision Conveyor 1:5 Conveyor 2: S 20704 21056
Conveyor 2: $
Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is
£10.
Part b
-21056
Save for Later
Attempts: 1 of 3 used
What must the cost of the second (more expensive) conveyor be for there to be no economic advantage between the two?
Cost of the second conveyor: $
Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is
+10.
Attempts: 0 of 3 used Submit Answer
Transcribed Image Text:Conveyor 2: $ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is £10. Part b -21056 Save for Later Attempts: 1 of 3 used What must the cost of the second (more expensive) conveyor be for there to be no economic advantage between the two? Cost of the second conveyor: $ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is +10. Attempts: 0 of 3 used Submit Answer
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