A machine purchased 3 years ago for $140,000 is now too slow to satisfy the demand of the customers. It can be upgraded now for$81,000 or sold to a smaller company Internationally for $42000. The upgraded machine will have an annual operating cost of$87,000 per year and a $32,000 salvage value in 3 years. If upgraded, the presently owned machine will be retalned for only 3 moreyears, then replaced with a machine to be used in the manufacture of several other product lines. The replacement machine, which willserve the company now and for a maximum of 8 years, costs $217,000. Its salvage value will be $52.000 for years 1 through 5:$20,000 after 6 years; and $10,000 thereafter. It will have an estimated operating cost of $45,000 per year. Perform an economicanalysis at 14% per year using a specified 3-year planning horizon.a) Determine if the current machine should be replaced now or 3 years from now.b) Once decided, determine the equlvalent AW for the next three years.a) The current machine should be replaced nowb) The equivalent AW for the next three years is $

The annual worth is the net of the relative multitude of advantages and costs brought about north of…

A machine purchased 3 years ago for $140.000 is now too slow to satisfy the demand of the customers. It can be upgraded now for $481,000 or sold to a smaller company Internationally for $42000. The upgraded machlne will have an annual operating cost of $487,000 per year and a $32.000 salvage value in 3 years. If upgraded, the presentiy owned machine wil be retalned for only 3 mon years, then replaced with a machine to be used in the manufacture of several other product lines. The replacement machine, which serve the company now and for a maximum of 8 years, costs $217,000. Its salvage value will be $52.000 for years 1 through 5: $20.000 after 6 years, and $10.000 thereafter. It will have an estimated operating cost of $45.000 per year. Perform an economic analysis at 14% per year using a specified 3-year planning horizon. a) Determine if the current machine should be replaced now or 3 years from now. bj Once decided, determine the equivalent AW for the next three years. a) The current machine should be replaced now

A machine purchased 3 years ago for $140.000 is now too slow to satisfy the demand of the customers. It can be upgraded now for $481,000 or sold to a smaller company Internationally for $42000. The upgraded machlne will have an annual operating cost of $487,000 per year and a $32.000 salvage value in 3 years. If upgraded, the presentiy owned machine wil be retalned for only 3 mon years, then replaced with a machine to be used in the manufacture of several other product lines. The replacement machine, which serve the company now and for a maximum of 8 years, costs $217,000. Its salvage value will be $52.000 for years 1 through 5: $20.000 after 6 years, and $10.000 thereafter. It will have an estimated operating cost of $45.000 per year. Perform an economic analysis at 14% per year using a specified 3-year planning horizon. a) Determine if the current machine should be replaced now or 3 years from now. bj Once decided, determine the equivalent AW for the next three years. a) The current machine should be replaced now

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

A machine purchased 3 years ago for $140,000 is now too slow to satisfy the demand of the customers. It can be upgraded now for
$81,000 or sold to a smaller company Internationally for $42000. The upgraded machine will have an annual operating cost of
$87,000 per year and a $32,000 salvage value in 3 years. If upgraded, the presently owned machine will be retalned for only 3 more
years, then replaced with a machine to be used in the manufacture of several other product lines. The replacement machine, which will
serve the company now and for a maximum of 8 years, costs $217,000. Its salvage value will be $52.000 for years 1 through 5:
$20,000 after 6 years; and $10,000 thereafter. It will have an estimated operating cost of $45,000 per year. Perform an economic
analysis at 14% per year using a specified 3-year planning horizon.
a) Determine if the current machine should be replaced now or 3 years from now.
b) Once decided, determine the equlvalent AW for the next three years.
a) The current machine should be replaced now
b) The equivalent AW for the next three years is $

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A machine was bought three years ago for $200,000 with the expected life of 8 years and a salvage value of $20,000. It now can be sold for $100,000. The annual operating cost for this machine over the next five years will be $30,000. A new machine can be purchased for $250,000, a salvage value of $20,000, expected life-of 10 years, and an annual operating cost of $20,000. Should we replace the old machine? MARR= 10%
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Breakeven Example 8.2 • MARR is 12% per year. Select the more economical vendor bid. -8,000 - 13.000 Initial cost. S -3,500 -1.600 Annual costs, S per year Salvage value. $ Life. vears 2,000 10
Subject - account Please help me. Thankyou.
A machine is purchased for an initial cost of $40,000. The machine has maintenance and operation costs of $2000 per year and generates $15,000 in revenue per year. The machine is expected to last for 3 years and have a salvage value of $5000. The rate of return is most nearly (rounded to nearest whole percentage): O a. 3% Ob.4% Oc. answer not given O d.5% O e. 7%
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