An old machine cost P48,000.00 a year to maintain. What expenditures for a new machine is justified if no maintenance will be acquired for the first 3 years, P12,000.00 per year for the next 7 years, and P48,000 a year thereafter? Assume money to cost 4% compounded annually and no other costs to be considered.

An old machine cost P48,000.00 a year to maintain. What expenditures for a new machine is justified if no maintenance will be acquired for the first 3 years, P12,000.00 per year for the next 7 years, and P48,000 a year thereafter? Assume money to cost 4% compounded annually and no other costs to be considered.

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 replacement electric motor is being considered for purchase. It is capable of providing 200 hp. The pertinent data are follows: Cost - 3200 dollars Maintenance Cost per year - 50 dollars Life expectancy - 14years Salvage value after - 1,429.93 dollars The motor is used for 400 h/year and the cost of electricity is 0.0 dollars/kWh. What is most nearly the effective annual cost using an interest rate of 10%
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ASAP
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Calculate the present worth of all costs for a newly acquired machine with an initial cost of $32,000, no trade-in value, a life of 14 years, and an annual operating cost of $17,000 for the first 3 years, increasing by 10% per year thereafter. Use an interest rate of 10% per year. The present worth of all costs for a newly acquired machine is determined to be $ [

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