A Pump manufacturer expects its materials cost to be $1,000,000 this quarter and to increase by $100,000 each quarter for the nest 4 years. What is the present worth of the costs for a 4-year time period at a MARR of 12% per year compounded quarterly?
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- Gardner Denver Company is considering the purchase of a new piece of factory equipment that will cost $420,000 and will generate $95,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further Instructions on internal rate of return in Excel, see Appendix C.Towson Industries is considering an investment of $256,950 that is expected to generate returns of $90,000 per year for each of the next four years. What Is the Investments internal rate of return?A restaurant is considering the purchase of new tables and chairs for their dining room with an initial investment cost of $515,000, and the restaurant expects an annual net cash flow of $103,000 per year. What is the payback period?
- The cost of a special purpose equipment will increase at the rate of 10% per year. If the cost for the first year is $10,000, what is the present worth of the costs for a 3-year time period at a MARR of 12% per year compounded annually? Your Answer:Equipment maintenance costs for manufacturing explosion-proof pressure switches are projected to be $125,000 in year one and increase by 3% each year through year five. What is the equivalent annual worth of the maintenance costs at an interest rate of 10% per year, compounded bi-monthly (compounded once in two months)? The equivalent annual worth is $A mixing process has an estimated first cost of $200,000. Income is expected to be $78,000 per year. At an MARR of 20% per year, what is the payback period?
- Equipment maintenance costs for manufacturing explosion-proof pressure switches are projected to be $125,000 in year 1 and increase by 3% each year through year 5. What is the equivalent annual worth of the maintenance costs at an interest rate of 10% per year, compounded semiannually? Solve using (a) the factor formula and (b) a spreadsheet.The textile factory is being upgraded. The expectation is that labor costs will decrease at an annual rate of 5% while overhead costs will increase at 8%. Now by the end of the first year the Labor costs $2million Material costs $3 million Overhead costs 1.6 million The time value of money rate is 11% and the time horizon is 7 years. Determine the dollar value for each cost category (labor, material, overhead) for each year and the total cost for each year. Determine the present worth of each cost category and the total cost. Determine the annual worth over 7 years that is equivalent to the present worth of the total cost.A new manufacturing plant costs $5 million to build. Operating and maintenance costs are estimated to be $45,000 per year and a salvage value of 25% of the initial cost is expected. The units the plant produces are sold for $35 each. Sales and production are designed to run 365 days per year. The planning horizon is 10 years. Find the break-even value for the number of units sold per day for the following value of MARR 15%.
- An investment will cost $10,000 today for equipment plus expenses for labor andmaterials at a continuous annual rate of $2,000 per year for the next four years. Theproject will begin earning back money at a continuous rate of $3,000 per year beginningfour years from now and continuing forever. Assuming an annual effective rate i=2%,calculate the discounted payback period.The cost for manufacturing a component used in intelligent interface converters was $23,000 the first year. The company expects the cost to increase by 2% each year. Calculate the present worth of this cost over a five-year period at an interest rate of 10% per year.A new process for manufacturing laser levels will have a first cost of $40,000 with annual cost o f$17,000. Extra income associated with the new process is expected to be $22,000 per year. Determine the payback period at:. (A) i= 0% (B) i= 10% per year