Note: don't use chat bot.. difference in the2.100 A low-cost noncontact temperature measuringtool may be able to identify railroad car wheelsthat are in need of repair long before a costly struc-tural failure occurs. If the BNSF railroad saves$100,000 in years 1 through 5, $110,000 in year 6,and constant amounts increasing by $10,000 eachyear through year 20, what is the equivalent annualworth over the 20 years of the savings? The inte-002 rest rate is 10% per year. Solve using (a) factors,dand (b) a spreadsheet.2 101 A stort un compony selling color-keved carnauba

Equivalent Annual Worth (EAW) is a financial metric used in capital budgeting to assess and compare…

Answered: A low-cost noncontact temperature…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 40P

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Saved Required information Pollution control equipment for a pulverized coal cyclone furnace is expected to cost $190,000 two years from now and another $120,000 3 years from now. If Monongahela Power wants to set aside enough money now to cover these costs, how much must be invested at an interest rate of 9% per year compounded weekly? NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. Solve using spreadsheet functions. The spreadsheet function used is PV(0.1731%, 104, -190000) + PV(0.1731%, 156,-120000)✓ The amount that must be invested by Monongahela Power is $
Commodity Copper is considering the installation of a $1,764,000 production conveyor system that would generate the following labor cost savings over its 10-year life: Years Annual Labor Cost Savings 1–2 $280,000 3–5 340,000 6–8 288,800 9–10 260,000 a. The system will have no salvage at the end of its 10-year life, and the company uses a discount rate of 12 percent. What is the pre-tax net present value of this potential investment?Note: Round your final answer to the nearest whole dollar.
Economics A new machine can be purchased for $80,000. Its expected useful life is 5 years, at which time its market value will be $6,000. Annual revenues less expenses due to the new machine will be $20,000 per year over the five-year period. Assume a MAŘR of 10% to determine if this is a good investment by using a) the PW method b) the FW method c) the AW method d) The IRR method e) The ERR method
A firm is considering three mutually exclusive alternatives as a part of an upgrade to an existing transportation network. If the MARR is 10% per year, which alternative(if any) should be chosen using the IRR analysis procedure? Use trial & error and show your calculations. A B C Initial Cost 40000 30000 20000 Annual Revenue 10400 8560 7750 Annual Cost 4000 3000 2500 Salvage Value 3000 2500 2000 Useful Life 20 20 10
12.5 (LG 12.2) A chemical plant is considering installing a new water purification system that costs $21 500. The expected service life of the system is 10 years and the salvage value is computed using the declining-balance method with a depreciation rate of 20 percent. The operating and maintenance costs are esti- mated to be $5 per hour of operation. The expected savings are $10 per operat- ing hour. a. Find the annual worth of the new water purification system if the current operating hours are 1500 per year, on average. The MARR is 10 percent. b. What is the break-even level of operating hours? Construct a graph showing the annual worth for various levels of operating hours.
What is the simple payback on this improvement? (Ignore Discount Rate) A silicon wafer manufacturing process has a potential improvement but the total cost of the system improvement over the expected remaining service life of 5 years is unknown. The initial cost of the improvement is $7,000 and the annual maintenance cost of the improvement is $650 with a discount rate of 8%. 1. What is the total cost of the machine improvement at the present time? 2. The process improvement is expected to generate a cost savings of about $3000 per year. What is the total cost savings of the improvement at the present time?
New-Project Analysis The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer’s base price is $1,080,000, and it would cost another $22,500 to install it. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $605,000. The MACRS rates for the first 3 years are 0.3333, 0.4445, and 0.1481. The machine would require an increase in net working capital (inventory) of $15,500. The sprayer would not change revenues, but it is expected to save the firm $380,000 per year in before-tax operating costs, mainly labor. Campbell’s marginal tax rate is 35%. What is the Year-0 cash flow? What are the net operating cash flows in Years 1, 2, and 3? What is the additional Year-3 cash flow (i.e., the after-tax salvage and the return of working capital)? If the project’s cost of capital is 12%, should the machine be purchased?
Average rate of returncost savings Maui Fabricators Inc. is considering an investment in equipment that will replace direct labor. The equipment has a cost of 125,000 with a 15,000 residual value and an eight-year life. The equipment will replace one employee who has an average wage of 28,000 per year. In addition, the equipment will have operating and energy costs of 5,150 per year. Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment.
A machine, costing $25000 to buy and $ 3000 per year to operate, will save mainly labor expenses in packaging over 6 years. The anticipated salvage value of the machine at the end of 6 years is $5000. To desire a 10% return on investment (rate of return), what is the minimum required annual savings in labor from this machine? Select one: a. $8092 b. $4050 c. $9010 d. $6092 12
Which process line should be built for a new chemical? The expected market for the chemi- cal is 20 years. A 9% rate is used to evaluate new process facilities, which are compared with present worth. How much does the better choice save? First O&M Cost Cost/year Salvage Life A $18M $5M $4M 10 years В 25M 3M 6M 20 years
Actuarial math An industrialist is considering the purchase of a new machine for $50000. If purchased, the machine can be used to convert $1000 of raw materials at the beginning of each year into widgets than can be sold for $9000 at the end of each year. The machine will last for 10 years, and it is worthless thereafter. The required rate of return is an annual effective rate of 8%. Calculate the net present value of purchasing the machine and operating it for 10 years.
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

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