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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 $80,000 with $2,500 salvage value after 16 years. The other can be purchased and installed for $105,000 with $2,500 salvage value after 16 years. Operation and maintenance for each is expected to be $17,500 and $11,500 per year, respectively. The granary uses MACRS-GDS depreciation, has a marginal tax rate of 25 %, and has a MARR of 9% after taxes. Click here to access the TVM Factor Table Calculator Click here to access the MACRS-GDS table. Part a Determine which alternative is less costly, based upon comparison of after-tax annual worth Show the AW values used to make your decision: Conveyor 1:$ Conveyor 2: S Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±10.

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 $80,000 with $2,500 salvage value after 16 years. The other can be purchased and installed for $105,000 with $2,500 salvage value after 16 years. Operation and maintenance for each is expected to be $17,500 and $11,500 per year, respectively. The granary uses MACRS-GDS depreciation, has a marginal tax rate of 25 %, and has a MARR of 9% after taxes. Click here to access the TVM Factor Table Calculator Click here to access the MACRS-GDS table. Part a Determine which alternative is less costly, based upon comparison of after-tax annual worth Show the AW values used to make your decision: Conveyor 1:$ Conveyor 2: S Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±10.

ENGR.ECONOMIC ANALYSIS
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 $80,000 with $2,500 salvage value after 16 years. The other can be purchased and installed for $105,000 with $2,500 salvage value after 16 years. Operation and maintenance for each is expected to be $17,500 and $11,500 per year, respectively. The granary uses MACRS-GDS depreciation, has a marginal tax rate of 25%, and has a MARR of 9% after taxes. Click here to access the TVM Factor Table Calculator Click here to access the MACRS-GDS table. Part a Determine which alternative is less costly, based upon comparison of after-tax annual worth. Show the AW values used to make your decision: Conveyor 1:$ Conveyor 2:$ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±10.
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 $80,000 with $2,500 salvage value after 16 years. The other can be purchased and installed for $105,000 with $2,500 salvage value after 16 years. Operation and maintenance for each is expected to be $17,500 and $11,500 per year, respectively. The granary uses MACRS-GDS depreciation, has a marginal tax rate of 25%, and has a MARR of 9% after taxes. Click here to access the TVM Factor Table Calculator Click here to access the MACRS-GDS table. Part a Determine which alternative is less costly, based upon comparison of after-tax annual worth. Show the AW values used to make your decision: Conveyor 1:$ 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 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.
Transcribed Image Text:Part b 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.
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