6- A machine has a first cost of $126,000, an annual operation and maintenance cost of $1850, a life of 8 years, and a salvage value of $27,000. At the end of Years 3 and 6, it requires a major service, which24 costs $14,000 and $16,500, respectively. What is the equivalent uniform annual cost of owning and operating this particular machine if interest is 6%?

here we calculate the equivalent uniform annual cost of the machine by using the given information so the calculation of the following by using the given data as follow-Here we calculate the following by using the given details as follow- Given - Machine Cost = 126,000 Annual Operating Cost = 1,850 Life = 8 years Salvage Value = 27,000 Major Service cost = At year 3 = 14,000 and At year 6 = 16,500 Calculate EUAC at interest rate of 6%. Now we put the values in the formula as follow- here we Calculate Present Worth as follow- PW = -126,000 – 1,850 (P/A, 6%, 8) – 14,000 (P/F, 6%, 3) – 16,500 (P/F, 6%, 6) + 27,000 (P/F, 6%, 8) PW = -126,000 – 1,850 (6.20979) – 14,000 (0.83962) – 16,500 (0.70496) + 27,000 (0.62741) PW = -143,934.45 now we calculate the EUAC as follow- EUAC = PW (A/P, 6%, 8) EUAC = -143,934.56 (0.16104) EUAC = -23,179.22 so here we conclude that here The equivalent uniform annual cost will be -$23,179.22

Business

Economics

- A machine has a first cost of $126,000, an annual operation and maintenance cost of $1850, a life of 8 years, and a salvage value of $27,000. At the end of Years 3 and 6, it requires a major service, whic 4 costs $14,000 and $16,500, respectively. What is the equivalent uniform annual cost of owning and operating this particular machine if interest is 6%?

- A machine has a first cost of $126,000, an annual operation and maintenance cost of $1850, a life of 8 years, and a salvage value of $27,000. At the end of Years 3 and 6, it requires a major service, whic 4 costs $14,000 and $16,500, respectively. What is the equivalent uniform annual cost of owning and operating this particular machine if interest is 6%?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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