A plant engineer wishes to know which of two types of lightbulbs should be used to light a warehouse. The bulbs that are currently used cost $49.40 per bulb and last 14,500 hours before burning out. The new bulb (at $63.3 per bulb) provides the same amount of light and consumes the same amount of energy, but it lasts twice as long. The labor cost to change. a bulb is $16.00. The lights are on 20 hours a day, 365 days a year. (Assume that the firm's marginal tax rate is 25%.) If the firm's MARR is 16%, what is the maximum price (per bulb) the engineer should be willing to pay to switch to the new bulb? Round the service life of the old bulb to the nearest whole number. Click the icon to view the interest factors for discrete compounding when /= 16% per year. **** The maximum price per new bulb the engineer should be willing to pay is $. (Round to one decimal place.)

A plant engineer wishes to know which of two types of lightbulbs should be used to light a warehouse. The bulbs that are currently used cost $49.40 per bulb and last 14,500 hours before burning out. The new bulb (at $63.3 per bulb) provides the same amount of light and consumes the same amount of energy, but it lasts twice as long. The labor cost to change. a bulb is $16.00. The lights are on 20 hours a day, 365 days a year. (Assume that the firm's marginal tax rate is 25%.) If the firm's MARR is 16%, what is the maximum price (per bulb) the engineer should be willing to pay to switch to the new bulb? Round the service life of the old bulb to the nearest whole number. Click the icon to view the interest factors for discrete compounding when /= 16% per year. **** The maximum price per new bulb the engineer should be willing to pay is $. (Round to one decimal place.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Your bakery can produce 3,000 unit of bagel per week for 48 weeks of operation per year. You aim to stay in this business for five years. You can either make the dough for the bagels in house or buy them from a different source. If you make the dough in house, you face with annual labour costs: $30,000, annual safety regulation costs: $5,000 and annual material costs: $20,000. But, if you choose to buy the dough from a different source, you must have a special dough-mixer machine to make adjustment for your production. Therefore, you need to pay $5,000 for the dough mixer machine, which has $1,000 salvage value at the end of 5 years. Furthermore, you face with annual maintaining costs including labour costs: $20,000 and additional overhead costs: $10,000 Using this information, find the unit cost of buy the bagel option with MARR 20%. Question 4 options: a) Between $0.70 and $0.80 b) None of the answers are correct…
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