A ski resort wishes to evaluate two alternative machines for ski and board tuning. Select the best alternative using the AW method at 9% per year.Cections 5.1 & 5.2)Machine RMachine SFirst cost, $-250,000|-40,000-370,500-50,000Annual operating cost, $ per yearLife, years24Salvage value, $20,00020,000

Annual operating cost is the cost which a firm is required to operate an asset on annual basis. This…

A ski resort wishes to evaluate two alternative machines for ski and board tuning. Select the best alternative using the AW method at 9% per year. ections 5.1 & 5.2) Machine R Machine S -370,500 First cost, $ Annual operating cost, $ per year -250,000 -40,000 -50,000

A ski resort wishes to evaluate two alternative machines for ski and board tuning. Select the best alternative using the AW method at 9% per year. ections 5.1 & 5.2) Machine R Machine S -370,500 First cost, $ Annual operating cost, $ per year -250,000 -40,000 -50,000

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A construction company is evaluating two similar pieces of equipment for their gravel pit operation. If the company policy is to use a MARR = 12%, determine which alternative is economically the better option. Use the EAC method: Option B $75,000 Item Option A $40,000 Initial Purchase Cost Operating Cost (1st year) $25,000 $15,000 Annual increase in Operating Cost No increase 2%/yr Lifespan Salvage Value @ end-of-life 4 years 6 years $10,000 $7,000 Do this question by hand.
Required information An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has an estimated first cost of $34,000, an annual operating cost (AOC) of $5,000, and a service life of 2 years. Method B will cost $77,000 to buy and will have an AOC of $4,000 over its 4-year service life. Method C costs $145,000 initially with an AOC of $6,500 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth 13% of its first cost. Perform a present worth analysis to select the method at i= 14% per year. The present worth of method A is $ The present worth of method B is $ The present worth of method C is $ Method (Click to select) v is selected.
The Mowbot plant must replace an existing HVAC unit (doing nothing is not an option). You are evaluating two pieces of equipment. Each unit offers a saving in annual energy cost over the existing equipment. Alternative Unit A Unit B Unit C Up front cost $44,000 $65,000 $84,000 Operating cost/year $1.900 $1.400 $900 Energy savings / year $14,000 $16,500 $17,500 Salvage Value $2,000 $4,000 $5,000 Economic life, years 7. 7. Mowbot's MARR is 12%. Based on annual worth analysis (not incremental), which unit should you recommend? HTML Editora BI 工E三 E三xi x ミ = ECE 12pt Paragraph
In the choice of mechanical equipment you are required to submit your recommendation as to which of the two steam shovels for earth excavation is better to buy. The basis is 20 year service & interest at 7%. Taxes & insurance are the same in each case: 5% & 1% respectively. Use Annual Cost & CC. 50-ton shovel 70 ton shovel First Cost P30k P38k 20 years 20 years P2k Life Salvage value Annual Operation Annual Upkeep Annual Output P3k P15k P17k P1.5k P2k 150k yards 200k yards
Determine if the selection of system 1 or 2 is sensitive to variation in the return required by management. The corporate MARR ranges from 8% to16% per year on different projects. Use tabulated factors or a spreadsheet, as requested by your instructor.
Current plan There are two fire brigades that each comprise five firefighters: three trainees and two experienced firefighters. The operating costs of each brigade, excluding staff salaries, average $130,000 per year. The equipment at each station initially cost $220,000 and has a current salvage value of $50,000. All equipment is depreciated on a straight-line basis based on an expected useful life of 10 years. Proposed plan Establish four fire brigades that each comprise three firefighters: two trainees and one experienced firefighter. The operating costs of each brigade, excluding staff salaries, is estimated to average $100,000 per year. Two more stations will need to be built, which would each cost $125,000. All existing equipment will be sold and replaced by upgraded equipment that would cost $250,000 per brigade. The average salary of trainee firefighters is $43,000 per year, while experienced firefighters earn $58,000 per year. A rate of return of 10% is required for…
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Tippy Toe Spa Company offers various services, such facials, laser hair removal and microdermabrasion. Currently, the company is considering purchasing the following spa equipment: Laser Hair Removal Machines Microdermabrasion Machines Facial Oxygen Units $64,500 $27,000 $126,400 $37,800 $91,400 $27,200 11% Cost per Machine Annual Cash Inflow Annual Cash Outflow Required Rate of Return Useful Life Residual Value 4 years $890 $29,700 $212,200 $197,900 14% 3 years $890 Laser Hair Removal Machine: Answer Years Microdermabrasion Machine: Answer Years Facial Oxygen Unit: Answer Years 7% Assume that each equipment's annual cash flow will occur for the period equal to its useful life. Do not enter dollar signs or commas in the input boxes. Use the present values tables in the textbook appendix. Use the negative sign for negative values. Round your answers to the nearest whole number. a) Determine the NPV of each piece of equipment. Laser Hair Removal Machine: $Answer Microdermabrasion…
A company is planning to install a new automated plastic-moulding press. Four different presses are available. The initial capital investments and annual expenses for these four mutually exclusive alternatives are as follows: Assume that each press has the same output capacity and has no market value at the end of its useful life; the selected analysis period is five years. Which press should be chosen? Use MARR = 20% per year.
4
Use the February 15, 2021U.S. Treasury quotes from TreasuryDirect shown below to calculate the spot rate for each date given in the table.
! Required information An engineer calculated the PW values for four alternatives to develop a remotely controlled vibrations control system for offshore platform applications. The results in the table use a MARR of 14% per year. Alternative Life, n, years PW over n years, $ PW over 6 years, $ PW over 12 years, $ || 3 16.08 26.94 39.21 J 14 31.12 15.78 60.45 K 12 -257.46 -653.29 -257.46 L 6 160 160 160 Determine which alternative(s) should be selected if the projects are independent. Alternative I is (Click to select) ✓ alternative J is (Click to select) (Click to select) ✓ alternative K is (Click to select) ✓ and alternative L is

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