A manufacturer with a MARR of 20% is considering the installation of one of three packagingmachines. The economic parameters of each machine are as follows:Packaging machine:Initial cost ($)Uniform annual benefit ($)Uniform annual O&M cost ($)XY20,00040,000120,000 180,00070,00050,0006Service life (years)3Salvage value end of life ($) 2,000 4,000Z15,000100,00070,000122,000Which choice below gives the correct PW equation for machine X over the appropriate analysisperiod?O PW (costs) = $20k + $20k (P/F,20%,6) + $70k (P/A,20%, 12) - $2k (P/F,20%,6) - $2k (P/F,20%,12)NPW = [ $120k (P/A,20%, 12) ] - [ $20k + $20k(P/F,20%,6) + $70k (P/A, 20%, 12) - $2k (P/F,20%,6) - $2k (P/F,20 %,12)]PW (benefits) = $120k (P/A,20%, 12)O NPW = ($120k-$70k) (P/A,20%,12)

Net Present Value (NPV) is a financial metric utilized to determine the profitability of an…

A manufacturer with a MARR of 20% is considering the installation of one of three packaging machines. The economic parameters of each machine are as follows: Packaging machine: Initial cost ($) X Y 20,000 40,000 120,000 180,000 70,000 50,000 Service life (years) 6 3 Salvage value end of life ($) 2,000 4,000 Uniform annual benefit ($) Uniform annual O&M cost ($) Z 15,000 100,000 70,000 12 2,000 Which choice below gives the correct PW equation for machine X over the appropriate analysis period? O PW (costs) = $20k + $20k (P/F,20%, 6) + $70k (P/A, 20%,12) - $2k ( P/F,20 %,6) - $2k (P/F,20 % ,12) NPW = [$120k (P/A, 20%, 12) ] - [$20k + $20k (P/F,20%,6) + $70k (P/A,20 %, 12) - $2k (P/F,20 %,6) - $2k (P/F,20%,12)] PW (benefits) = $120k (P/A,20%, 12) NPW=($120k-$70k) (P/A 20% 12)

A manufacturer with a MARR of 20% is considering the installation of one of three packaging machines. The economic parameters of each machine are as follows: Packaging machine: Initial cost ($) X Y 20,000 40,000 120,000 180,000 70,000 50,000 Service life (years) 6 3 Salvage value end of life ($) 2,000 4,000 Uniform annual benefit ($) Uniform annual O&M cost ($) Z 15,000 100,000 70,000 12 2,000 Which choice below gives the correct PW equation for machine X over the appropriate analysis period? O PW (costs) = $20k + $20k (P/F,20%, 6) + $70k (P/A, 20%,12) - $2k ( P/F,20 %,6) - $2k (P/F,20 % ,12) NPW = [$120k (P/A, 20%, 12) ] - [$20k + $20k (P/F,20%,6) + $70k (P/A,20 %, 12) - $2k (P/F,20 %,6) - $2k (P/F,20%,12)] PW (benefits) = $120k (P/A,20%, 12) NPW=($120k-$70k) (P/A 20% 12)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Complete the following analysis of cost alternatives and select the preferred alternative. The study period is 10 years and the MARR = 15% per year. "Do Nothing" is not an option. A B C Capital investment $15,000 $16,000 $13,500 $18,100 Annual costs 260 290 450 110 Market value at EOY 10 900 1,350 1,700 2,050 FW (15%) - $65,062 - $69,267 ??? - $73,408
An asset has a first cost of $17000 , an annual operationg cost of $8000 and a salavage value of $5000 after 3 years. calculate the annual worth for one cycle at i=10% . (a) 32145 (b) 4376 (c) 4376 (d) 13325
5- Year SV O&M 15,000 1000 12,000 1500 9,000 The table above lists salve value (SV) and operating and maintenance (O&M) cost of an asset through 3 years with the initial cost of $20,000. Given MARR is 10%, which of the statements 3 2000 is correct (choose the closest answer)? a) The marginal cost at year 2 is $6,000 and the annual cost (EUAC) through year two is $6,500 b) The marginal cost at year 2 is $6,000 and the annual cost (EUAC) through year two is $7,048 c) The marginal cost at year 2 is $6,500 and the annual cost (EUAC) through year two is $7,048 d) The marginal cost at year 2 is $6,500 and the annual cost (EUAC) through year two is $6,000
I need help using the IRR and ERR method for this problem. Steps of what's happening would be helpful
2. A construction firm plans to purchase new excavator. Two manufacturers offered to the company with the respective estimates below. Descriptions First cost, PhP (in 1000 Php) Annual M&O cost, PhP/ Year (in 1000 Php) Salvage value, PhP Economic life, Years Seller A 15,000 3,500 1,000 6 Seller B 18,000 3,100 2,000 9
10
A cost analysis is to be made to determine what, if anything, should be done in a situation offering three alternatives in addition to doing nothing. Costs and benefits of the alternatives are estimated as follows: Alternative Cost Uniform Annual Benefit Residual Value Useful life (years) A 450,000 150,000 0 4 B 550,000 125,000 300,000 4 с 800,000 135,000 250,000 8 Use an 8-year analysis period, "stacking" projects as necessary. Use Excel to choose which, if any, of the projects should be chosen: MÁRR is 15%. a. Using annual worth analysis b. Using rate of return analysis
Kk.7.
None
Motor A and B is providing 150hp and it is being used for 10 hours per day, 250 days in a year if the motor is using the electricity. Additional cost for both motors is the annual maintenance cost worth 1200 and other manufacturing overhead costing 550 per month. Motor A has an original price of 50,000 while 45000 for Motor B, and both have the salvage value of 3000 after 5 years. Machine efficiency is 92% and 90% respectively.A. How much is the electrical cost if the money is worth 15%? Electrical cost = pesos ( 2 decimal places ) B. With the same initial cost, salvage value, expected life, number of working days per year, annual maintenance cost and manufacturing overhead. How much is the fuel cost if the interest rate is 10% compounded annually if motor A needs to be refilled by 2L/ output while motor B requires a 3L/output, and the target output per day is 10 outputs?
Marmara Processing Technologies Company wants to buy milling cutters in order to meet its increasing production needs. As a result of the studies, the data in the table below were found. According to these data, what will be the current cost of the annual operating expense parameter of alternative B? A Purchase Cost 10.000 12.000 Annual Operating Expense 1.500 1.700 Scrap Values 2.000 3.000 Economic Life 4 4 Capital Cost 10% 10%
Kooche Company plans to invest $1,000,000 in projects next year. $700,000 will be provided through debt capital with a before tax cost of 7.3%. The remaining $300,000 will be provided through equity capital at a cost of 6.5%. Kooche's corporate tax rate is 40%. What is the weighted average cost of capital? (a) 5.02% (b) 6.50% (C) 7.06% (d) 13.80%