Apricot Computers is considering replacing its material handling system and either purchasing or leasinga new system. The old system has an annual operating and maintenance cost of $33,000, a remaining lifeof 8 years, and an estimated salvage value of $4,800 at that time.A new system can be purchased for $284,000; it will be worth $26,000 in 8 years; and it will have annualoperating and maintenance costs of $17,000/year. If the new system is purchased, the old system can betraded in for $18,000.Leasing a new system will cost $24,000/year, payable at the beginning of the year, plus operating costs of$9,100/year, payable at the end of the year. If the new system is leased, the old system will be sold for$8,400.MARR is 16%. Compare the annual worths of keeping the old system, buying a new system, and leasing anew system based upon a planning horizon of 8 years.Click here to access the TVM Factor Table CalculatorFor calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answer to 2decimal places, e.g. 52.75. The absolute cell tolerance is ±1Part aWhat is the EUAC of the best option using the cash flow approach?

2. Cash Flow Analysis:a) Keep Old System:Annual Cash Flow = - Annual O&M Cost + Salvage Value…

Answered: Apricot Computers is considering…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Two types of power converters are under consideration for a specific application. An economic comparison is to be made using a MARR of 20% and the following cost estimates: Please Show your work Description Service life First cost Alt1 (Alpha) Alt2. (Beta) 7 11 $12,000 $22,000 0 $7,000 Annual operating cost $2,500 $1,200 Salvage value (a) Compute the equivalent annual costs of each alternative and recommend the economically superior alternative. (b) Determine a salvage value for the Beta system such that the Beta system will have an equivalent uniform annual cost equal to the Alpha system.
! Required information An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has an estimated first cost of $31,000, an annual operating cost (AOC) of $5,000, and a service life of 2 years. Method B will cost $71,000 to buy and will have an AOC of $3,500 over its 4-year service life. Method C costs $117,000 initially with an AOC of $3,500 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth 7% of its first cost. Perform a present worth analysis to select the method at i = 9% per year. The present worth of method A is $ -114,678.6 The present worth of method B is $ -140,668.2 The present worth of method C is $ -132261.24 Method A is selected.
A factory manager bought a rare machine for $10 million. of the machine The sales value at the end of the first year will be $3 million and the machine will be sold by antique dealers. It is estimated to be valued at $500,000 due to the Initial cost of maintenance Expected to be $300,000 in 3 years and double each year thereafter. In this way, the maintenance cost of the 4th year is $600,000, the maintenance cost of the 5th year is $1,200,000, etc. will be. Calculate the economic life of this machine based on the Minimum Attractive Efficiency Ratio of 15%.
! Required information An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has an estimated first cost of $40,000, an annual operating cost (AOC) of $12,000, and a service life of 2 years. Method B will cost $70,000 to buy and will have an AOC of $6,000 over its 4-year service life. Method C costs $125,000 initially with an AOC of $3,500 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth 7% of its first cost. Perform a present worth analysis to select the method at /= 12% per year. The present worth of method A is $ The present worth of method B is $ The present worth of method C is $ ✓is selected. Method C
! Required information An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has an estimated first cost of $41,000, an annual operating cost (AOC) of $13,000, and a service life of 2 years. Method B will cost $82,000 to buy and will have an AOC of $4,500 over its 4-year service life. Method C costs $117,000 initially with an AOC of $4,500 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth 9% of its first cost. Perform a future worth analysis to select the method at i = 8% per year. The future worth of method A is $ 65,832.64 The future worth of method B is $ 98,183.44 The future worth of method C is $ 157,622.43 > Method с Return to question is selected.
A large city in mid-west needs to buy a street-cleaning machine. A used vehicle will cost $75000 and has a market value of $20000 after its five-year life. A new system cost $150000 and has a market value of $40000 after five-years. The new system has some features that reduce labor hours compared with used system. the used system requires labor hours of 8 hours per day and 20 days per month. the labor costs are $50 per hour. the MARR is 12%. if the new system is expected to be able to reduce labor hours by 20% compared with the used system, which system should the city purchase? and how many hours must the system be operated at the break even?
Hand written solutions are strictly prohibited
Apricot Computers is considering replacing its material handling system and either purchasing or leasing a new system. The old system has an annual operating and maintenance cost of $31,000, a remaining life of 8 years, and an estimated salvage value of $5,300 at that time. A new system can be purchased for $259,000; it will be worth $24,000 in 8 years; and it will have annual operating and maintenance costs of $16,000/year. If the new system is purchased, the old system can be traded in for $19,000. Leasing a new system will cost $25,000/year, payable at the beginning of the year, plus operating costs of $7,100/year, payable at the end of the year. If the new system is leased, the old system will be sold for $9,000. MARR is 15%. Compare the annual worths of keeping the old system, buying a new system, and leasing a new system based upon a planning horizon of 8 years. Click here to access the TVM Factor Table Calculator For calculation purposes, use 5 decimal places as displayed in the…
Mr. Garcia sold his machine for P20,000 after using it for 6 years. He bought a new machine worth 75,000 with an expected life of 12 years and a salvage value of 2,000. The operating cost is P5,500 per year. The old machine which he bought for P50,000 when new will be useful for 10 years and a junk value of 1,000 but because of appropriate maintenance, it will be useful for another 5 years, no salvage value, with an annual operating cost of twice the new one. If money is worth 12%, was the engineer justified in selling the old machine? Use the ROR method. Show complete solution. Thank you
An appliance manufacturing company intends to produce three models of electric fans. These models are the Stand Fan, Wall Fan, and Ceiling Fan. The table below shows the available information on these three models. Stand Fan P 750.00 P 300.00 How many units of each model should be sold each month to breakeven? Type of Cost Selling Price/Unit Variable Cost/Unit Wall Fan P 500.00 P 250.00 Ceiling Fan P 1,000.00 P 500.00 What are the breakeven sales each month?
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Comparison of Alternative

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