An existing robot can be kept if $2,000 is spent now to upgrade it for future service requirements. Alternatively, the company can purchase a newrobot to replace the old robot. The following estimates have been developed for both the defender and the challenger. The company's before-taxMARR is 18% per year. Based on this information, should the existing robot be replaced right now? Assume the robot will be needed for anindefinite period of time.DefenderCurrent MVRequired upgradeAnnual expensesThe AW value of the defender is $The AW value of the challenger is $The existing robotAnnual expensesRemaining useful life5 yearsUseful lifeMV at end of useful life-$1,400MV at end of useful lifeClick the icon to view the interest and annuity table for discrete compounding when the MARR is 18% per year.be replaced right now.should notshouldN12345678910(Round to the nearest dollar)(Round to the nearest dollar)info$36.000$2,000$1,500CompoundAmountFactorSingle PaymentTo Find FGiven PF/P1.18001.39241.64301.93882.28782.69963.18553.75894.43555.2338Discrete Compounding: /-18%CompoundAmountFactorTo Find FGiven AFIAPresentWorth FactorTo Find PGiven FP/F0.84750.71820.60860.51580.43710.37040.3139ChallengerPurchase priceInstallation cost0.26600.22550.1911Print1.00002.18003.57245.21547.15429.442012.141515.327019.085923.5213DonePresentWorth FactorTo Find PGiven AP/A0.8475$52,000$6,000$1,000Uniform Series1.56562.17432.69013.12723.49763.81154.07764.30304.494110 years$6,500SinkingFundFactorTo Find AGiven FAF1.00000.45870.27990.19170.13980.10590.08240.06520.05240.0425- X1.18000.63870.45990.37170.31980 28590.26240.24520.23240.2225-CapitalRecoveryFactorTo Find AGiven PA/PIM3H

Annual worth (AW) is the present value of all future cash flows from an asset or project,…

An existing robot can be kept if $2,000 is spent now to upgrade it for future service requirements. Alternatively, the company can purchase a m robot to replace the old robot. The following estimates have been developed for both the defender and the challenger. The company's before-t MARR is 18% per year. Based on this information, should the existing robot be replaced right now? Assume the robot will be needed for an indefinite period of time. $36,000 Challenger Purchase price Installation cost Annual expenses $2.000 $1,500 Remaining useful life 5 years Useful life MV at end of useful life -$1,400 MV at end of useful life Click the icon to view the interest and annuity table for discrete compounding when the MARR is 18% per year. Defender Current MV ☆ Required upgrade Annual expenses The AW value of the defender is $ The AW value of the challenger is $ The existing robot (Round to the nearest dollar) (Round to the nearest dollar) be replaced right now. $52,000 $6,000 $1,000 10 years $6,500

An existing robot can be kept if $2,000 is spent now to upgrade it for future service requirements. Alternatively, the company can purchase a m robot to replace the old robot. The following estimates have been developed for both the defender and the challenger. The company's before-t MARR is 18% per year. Based on this information, should the existing robot be replaced right now? Assume the robot will be needed for an indefinite period of time. $36,000 Challenger Purchase price Installation cost Annual expenses $2.000 $1,500 Remaining useful life 5 years Useful life MV at end of useful life -$1,400 MV at end of useful life Click the icon to view the interest and annuity table for discrete compounding when the MARR is 18% per year. Defender Current MV ☆ Required upgrade Annual expenses The AW value of the defender is $ The AW value of the challenger is $ The existing robot (Round to the nearest dollar) (Round to the nearest dollar) be replaced right now. $52,000 $6,000 $1,000 10 years $6,500

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

A mining company is performing an economic analysis between two equipment. The initial price for Equipment is $200,000 and has a service life of 1 years with operating and maintenance costs of $8000 per year. If the equipment can generate gross annual revenues of $41000 and the company uses an annual MARR of 6%, calculate the equipment's discounted payback period
A power plant operator is considering an investment in increased efficiency of their plant that costs $2 million and lasts for 10 years, during which time it will save $500,000/year. The investment has no salvage value. The plant has an MARR of 10%. Is the investment viable?
1/ Q4. [. The present worth of the cash flows through year k, PWk for a defender (3-year remaining useful life) are shown in the table below. Assume the MARR is 10% per year. Based on this information, What is the economic life and the related minimum equivalent uniform annual cost, EUAC, for the defender? b. Compute marginal cost, show your calculations and fill the table below. Year(k) PWK a. 1 2 3 -$14,020 -$28,100 -$43,075 Total (marginal) cost EUAC
None
Find the conventional payback period for the following project: First Cost $10,000 $500 in Year 1, increasing by $200/year $3,000/year $4,000 Maintenance Income Salvage Useful Life 10 years MARR 10%
11-8. The Ford Motor Company is considering three mutually exclusive electronic stability control systems for protection against rollover of its automobiles. The investment (study) period is four years, and MARR is 12% per year. Data for the fixture costs of the systems are as follows. Alternatives В Annual savings MV (after 4 years) Capital investment $12,000 $15,800 $8,000 $4,000 $5,200 $3,000 $3,500 $1,500 $3,000 IRR 19.2% 18% 23% Plot the AW of each alternative against MARR as the MARR varies across this range: 4%, 8%, 12%, 16%, and 20%. What can you generalize about the range of the MARR for which each alternative is preferred? (11.2)
Answer part A Answer part B
A $45,000 investment in a new conveyor system is projected to improve throughput and increasing revenue by $14,000 per year for five years The conveyor will have an estimated market value of $4,000 at the end of five years. Using an MARR = 12% per year, what is the FW? $-19,329.40 $13,635.70 $16,998.90 none of the above W ?
Octavia Bakery is planning to purchase one of two ovens. The expected cash flows for each oven are shown below. MARR is 8%/year. Model 127B Model 334A Initial Investment $50,000 $80,000 Estimated Life 10 5 End of Life Salvage $10,000 $0 Annual Income $19,400 $26,000 Annual Expense $10,000 $6,000 2(a) What is the discounted payback period for each investment? 2(b) Which oven should Octavia Bakery purchase if they wish to minimize the DPBP? Answer:
A $45,000 investment in a new conveyor system is projected to improve throughput and increasing revenue by $14,000 per year for five years The conveyor will have an estimated market value of $4,000 at the end of five years. Using an MARR = 12% per year, what is the FW? $-19,329.40 $13,635.70 $16,998.90 none of the above K ?