An oil refinery finds that it is necessary to treat the waste liquids from a new process before discharging them into a stream. The treatment will cost $40,000 the first year, but process improvements will allow the costs to decline by $4,000 each year. As an alternative, an outside company will process the wastes for the fixed price of $20,000/year throughout the 7 year period, payable at the beginning of each year. Either way, there is no need to treat the wastes after 7 years. Use the annual worth method to determine how the wastes should be processed. The company's MARR is 12%. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year The AW of the in-house treatment is 5 (Round to the nearest dollar) COTS

An oil refinery finds that it is necessary to treat the waste liquids from a new process before discharging them into a stream. The treatment will cost $40,000 the first year, but process improvements will allow the costs to decline by $4,000 each year. As an alternative, an outside company will process the wastes for the fixed price of $20,000/year throughout the 7 year period, payable at the beginning of each year. Either way, there is no need to treat the wastes after 7 years. Use the annual worth method to determine how the wastes should be processed. The company's MARR is 12%. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year The AW of the in-house treatment is 5 (Round to the nearest dollar) COTS

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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! Required information Eight years ago, Ohio Valley Trucking purchased a large- capacity dump truck for $102,000 to provide short-haul earth-moving services. The company sold it today for $45,000. Operating and maintenance costs averaged $10,200 per year. A complete overhaul at the end of year 4 costs an extra $3600. Calculate the annual cost of the truck at i = 8% per year. The annual cost of the truck is $- per year.
The Ford Motor Company has re-designed its best selling truck by substituting aluminum for steel in many key body parts. This saves 600 pounds of weight and decreases gas consumption. The fuel consumption will be 27 miles per gallon (mpg), up from 24 mpg of the previous year's model. Ford will increase the sticker price of the re-designed vehicle by $470. Assume this vehicle will be driven 16,000 miles per year and its life will be 9 years. The owner's MARR is 8% per year and gasoline costs $3.02 per gallon. What is the present worth of the incremental capital outlay for the lighter truck? Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year. The present worth of the incremental capital outlay for the lighter truck is $ (Round to the nearest dollar.)
Please help.
Calculate the annual worth of a machine that has an initial cost of $35,000, a life of 10 years, and an annual operating cost of $10,000 for the first 4 years, increasing by 1000 per year hereafter. Use an interest rate of 15% per year.
Two investments totaling $60,000 produce an annual income of $3410. One investment yields 5% per year, while the other yields 6% per year. How much is invested at each rate?