An injection molding system has a first cost of $180,000 and an annual operating cost of $84,000 in years 1 and 2, increasing by $5,000 per year thereafter. The salvage value of the system is 25% of the first cost regardless of when the system is retired within its maximum useful life of 5 years. Using a MARR of 15% per year, determine the ESL and the respective AW value of the system. via spreadsheet that graphs the total AW and its components
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- TRUE OR FALSE: If there is a past estimation error, there is a need to replace the property immediately. The physical life is always greater than all the other “life” factors under replacement analysis. If breakeven analysis is conducted with PW analysis for different MEAs, it doesn’t guarantee that the fastestalternative to reach its breakeven point has also the highest equivalent worth.White Oaks Properties builds strip shopping centers and small malls. The company plans to replace its refrigeration, cooking, and HVAC equipment with newer models in one entire center built 9 years ago. 9 years ago, the original purchase price of the equipment was $625,000 and the operating cost has averaged $275,000 per year. Determine the equivalent annual cost of the equipment if the company can now sell it for $224,000. The company's MARR is 22% per year. The equivalent annual cost of the equipment is determined to be $1 Leonard, a company that manufactures explosion-proof motors, is considering two alternatives for expanding its international export capacity. Option 1 requires equipment purchases of $945,000 now and $440,000 two years from now, with annual M&O costs of $72,000 in years 1 through 10. Option 2 involves subcontracting some of the production at costs of $235,000 per year beginning now through the end of year 10. Neither option will have a significant salvage value.…AE Criterion - Single Project* *Blank & Tarquin (2005). Engineering Economy, 7th edition. Example 6.3. The owner of a pizza shop plans to purchase and install five portable in-car systems to increase delivery speed and accuracy. Each system costs $4600, has a 5-year useful life, and may be salvaged for an estimated $300. Total operating cost for all systems is $1000 for the first year, increasing by $100 per year thereafter. The owner estimates increased net income of $6000 per year for all five systems. Is this project financially viable at an MARR of 10%?
- White Oaks Properties builds strip shopping centers and small malls. The company plans to replace its refrigeration, cooking, and HVAC equipment with newer models in one entire center built 10 years ago. 10 years ago, the original purchase price of the equipment was $775,000 and the operating cost has averaged $275,000 per year. Determine the equivalent annual cost of the equipment if the company can now sell it for $174,000. The company's MARR is 19% per year. The equivalent annual cost of the equipment is determined to be $An international textile company's North America Division must decide which type of fabric cutting machines it will use-straight knife or round knife. The estimates are summarized below. Compare them on the basis of annual worth values at i = 10% per year. Which device do you recommend? First cost, $ AOC, $/year Overhaul in year 2, $ Salvage value, $ Life, years Round Knife -250,000 -31,000 40,000 6 Straight Knife -170,000 -35,000 -26,000 10,000 4Two small engines are designed to help cleaning operation in a petrochemical company. Both seem to be very promising and we need to decide which is better or conditions to make the choice indifferent. COSTS ENGINE 1 Installation/First Costs $ 1,500,000 Operating Costs $/year Salvage Value $ Life in years ENGINE 2 2,250,000 700,000 600,000 100,000 50,000 18 8 If a MARR of 10% per year is provided, then compare Annual Worth and select: [Select] Determine the SALVAGE VALUE for Engine 2 that would make Any choice INDIFFERENT: [Select]
- A building is adding 27,000 square feet to their existing structure. The costs include a construction cost of $40/ square foot. Annual costs include a fixed cost of $60,000 and variable costs of $3 per square foot per year. The market value is expected to be 33% of construction costs at the end of 20 years. Find the capital recovery cost if the MARR is 4%.An independent contractor for a transportation company needs to determine whether she should upgrade the vehicle she currently owns or trade her vehicle in to lease a new vehicle. If she keeps her vehicle, she will need to invest in immediate upgrades that cost $4,700 and it will cost $1,450 per year to operate at the end of year that follows. She will keep the vehicle for 6 years; at the end of thi period, the upgraded vehicle will have a salvage value of $4,300. Alternatively, she could trade in her vehicle to lease a new vehicle. Sh estimates that her current vehicle has a trade-in value of $9.300 and that there will be $4,500 due at lease signing. She further estimates that it will cost $3,300 per year to lease and operate the vehicle. The independent contractor's MARR is 12%. Compute the EUAC of both the upgrade and lease alternatives using the insider perspective. Click here to access the TVM Factor Table Calculator. EUAC(keep): EUAC(lease): $ S Carry all interim calculations to…An industrial machine costing $10,000 will produce net cash savings of $4,000 per year. The machine has a five-year useful life but must be returned to the factory for major repairs after three years of operation. These repairs cost $5,000. The company's MARR is 10% per year. What IRR will be earned on the purchase of this machine? Analyze the sensitivity of IRR to $2,000 changes in the repair cost. Perform the sensitivity analysis. Fill-in the table below. (Round to one decimal place.) Change in the repair cost - $2,000 $0 IRR 21.05% % Is the project acceptable? Yes
- A granary has two options for a conveyor used in the manufacture of grain for transporting, filling, or emptying. One conveyor can be purchased and installed for $95.000 with $1,500 salvage value after 16 years. The other can be purchased and installed for $95,000 with $2,500 salvage value after 16 years. Operation and maintenance for each is expected to be $15,000 and $15,500 per year. respectively. The granary uses MACRS-GDS depreciation, has a marginal tax rate of 25%, and has a MARR of 9% after taxes. Click here to access the TVM Factor Table Calculator Click here to access the MACRS-GDS table. Part a Your answer is correct. Determine which alternative is less costly, based upon comparison of after-tax annual worth. Alternative 1 Show the AW values used to make your decision: Conveyor 1: $ Conveyor 2: $ Part b -20704 -21056 Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±10. x Your answer is incorrect.…White Oaks Properties builds strip shopping centers and small malls. The company plans to replace its refrigeration, cooking, and HVAC equipment with newer models in one entire center built 10 years ago. 10 years ago, the original purchase price of the equipment was $700,000 and the operating cost has averaged $250,000 per year. Determine the equivalent annual cost of the equipment if the company can now sell it for $204,000. The company's MARR is 20% per year. i set it up as followed but somehow this is incorrect: 700000(A/P, 20%,10)+250000- 204000(A/F, 20%,10) can someone help me out thanksA piece of equipment has a first cost of $60000, a maximum useful life of 4 years, and a market (salvage) value described by the relation Sk = 48000 – 8400k, where k is the number of years since it was purchased. The AOC series is estimated using AOC = 24000 + 3600k. The interest rate is 9% per year. When should the company replace this asset?