" Austin General Hospital is evaluating new office equipment offered by threecompanies. The equipment have the following characteristics:Company AInitial cost$15,000Annual operating cost1,600Company B$25,000400Annual benefit(revenue)8,00013,000Salvage value3,0006,000Useful life (years)4Company C$20,00090011,0004,500Determine the present worth (net present value) of the equipment from each of thecompanies, and decide which one should be selected. MARR = 15%.

Answered: Image /qna-images/answer/445a2650-2170-4e2b-94ef-7b010851c052.jpg

と Austin General Hospital is evaluating new office equipment offered by three companies. The equipment have the following characteristics: Initial cost Company A $15,000 Company B Company C Annual operating cost 1,600 $25,000 400 $20,000 900 Annual benefit(revenue) 8,000 13,000 11,000 Salvage value 3,000 6,000 4,500 Useful life (years) 4 4 Determine the present worth (net present value) of the equipment from each of the companies, and decide which one should be selected. MARR = 15%.

と Austin General Hospital is evaluating new office equipment offered by three companies. The equipment have the following characteristics: Initial cost Company A $15,000 Company B Company C Annual operating cost 1,600 $25,000 400 $20,000 900 Annual benefit(revenue) 8,000 13,000 11,000 Salvage value 3,000 6,000 4,500 Useful life (years) 4 4 Determine the present worth (net present value) of the equipment from each of the companies, and decide which one should be selected. MARR = 15%.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: Two pieces of equipment are being considered. Machine A costs $1,000 and has a useful life of 8…

A: NPV stands for Net Present Value, which is a financial measure used to evaluate the profitability of…

Q: A city is planning to renovate their current facility with hi-tech computerized systems. Four plans…

A: The B/C ratio analysis is a tool used to assess the feasibility of a project by calculating the…

Q: An initial investment of P1, 000, 000 was put up for a new business that will produce an annual…

A: Answer:

Q: 2. A construction firm plans to purchase new excavator. Two manufacturers offered to company with…

A: Here we will compare these two options using PW method. The economic life is different here so we…

Q: Required Information The Bureau of Indian Affairs provides various services to American Indians and…

A: The present worth of a project or investment refers to its value at present based on the associated…

Q: Question 10 has given inputs. Asking for help with solving question 11, finding the ERR of the…

A: Approach to solving the question: Detailed explanation: Examples: Key references: General Finance

Q: help please answer in text form with proper workings and explanation for each and every part and…

A: Base on MARR calculated in part a, Creamy is better than Smoothie

Q: (b) A large company is considering four machines to select one of them to meet the company's…

A: Answer - Given in the question- Part 1 Answer - Need to find- Estimate the cost of each product of…

Q: Required information The Briggs and Stratton Commercial Division cesigns and manufacturers small…

A: We will use the annual equivalent cost method to find the salvage value for the push system that…

Q: A В D E F G J K L M Cost Per Case Cases Sold Sales Discount Net 1 Year Quarter Winery 1991 Q1 1991…

A: The calculations has been done with the help of Excel. Sales amount was determined by multiplying…

Q: The All-State Mutual Fund has the following 5-year record of performance:. Find this no-load fund's…

A: Given, year201420152016201720182019Beginning NAV $( 10.00)Dividends $ 0.60 $ 0.75 $ 0.85 $…

Q: 14. R TOPIC: ENGINEERING ECONOMICS PLEASE ANSWER IN 4 DECIMAL POINTS

A: The total annual cost of machine A is equal to the sum of capital recovery cost and annual operating…

Q: The following annual costs are associated with three new extruder machines being considered for use…

A: Cash flow from operations contains expenditures made as part of the typical course of operations.…

Q: Electrical switch manufacturing companies must choose one of three different assembly methods.…

A: In this method of comparison, the cash flows of every option will be decreased to time zero by…

Q: Using the below details, answer the following questions. Use interest rate = 10% (must show your…

A: The Life of both the machines is unequal in the given question. In order to make comparison between…

Q: Problem 2 As a Civil Engineer you are evaluating two different pieces of equipment for the building.…

Q: A remotely located air sampling station can be powered by solar cells or by running an electric line…

A: Using the FV calculation, investors may make educated guesses about how much money they can expect…

Q: Using LCM Method (Unequal Lives) solve the problem: Two location alternatives A and B, where one can…

A: Alternative selection can be done using present worth analysis but to perform present worth…

Q: A piece of property is purchased for $25,000 and yields a $1500 yearly net profit. The property is…

A: The time value of money refers to a sum of money that is worth greater now than the same sum of…

Q: It’s time to get a new laptop that is $2500. If you finance it, you will be charged 8% annual…

A: a) We can tackle this problem the given approach If it is compounded monthly Interest rate would be…

Q: Турe А Туре в First Cost Annual Opperating Cost Annual Labor Cost Insurance and Property Taxes…

A: Given: Type A Type B First cost 300000 200000 Annual Operating cost 32000 24000 Annual…

Question

" Austin General Hospital is evaluating new office equipment offered by three
companies. The equipment have the following characteristics:
Company A
Initial cost
$15,000
Annual operating cost
1,600
Company B
$25,000
400
Annual benefit(revenue)
8,000
13,000
Salvage value
3,000
6,000
Useful life (years)
4
Company C
$20,000
900
11,000
4,500
Determine the present worth (net present value) of the equipment from each of the
companies, and decide which one should be selected. MARR = 15%.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1: Given data,

VIEW

Step 2: Present worth analysis

VIEW

Step 3: Present worth for Company A

VIEW

Step 4: Present worth for Company B

VIEW

Step 5: Present worth for Company C

VIEW

Solution

VIEW

Step by step

Solved in 6 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

2-8 Consider the accompanying breakeven graph for an investment, and answer the following questions as they pertain to the graph. Euros (x104) €40r 585850 35 30 25 20 15 10 s 0 Total Revenue Total Cost 250 500 750 1000 1250 1500 1750 Output (units/year) Give the equation to describe total revenue for x units per year. (b) Give the equation to describe total costs for x units per year. (c) What is the "breakeven" level of x in terms of costs and revenues? (d) If you sell 1500 units this year, will you have a profit or loss? How much?
IPS Corp. will upgrade its package-labeling machinery. It costs $850,000 to buy the machinery and have it installed. Operation and maintenance costs, which are $11,000 per year for the first 3 years, increase by $1000 per year for the machine’s 10-year life. The machinery has a salvage value of 12% of its initial cost. Interest is 25%. What is the future worth of cost of the machinery? dont use excel. dont write answer in a paper becouse of handwriting. thanks
The table below provides the total revenues and costs for a small landscaping company in a recent year. Total Revenues ($) 250 000 Total Costs ($) wages and salaries 150 000 - risk-free return of 2% on owner's capital of $20 000 400 - interest on bank loan 1500 cost of supplies 27 000 depreciation of capital equipment 8000 - additional wages the owner could have earned in next best alternative 30-000 800 - risk premium of 4% on owner's capital of $20 000 a. Refer to Table calculate explicit costs for this firm? b. Refer to Table calculate implicit costs for this firm? C. Refer to Table, what is the accounting profits for this firm are? d. Refer to Table, calculate he economic profits for this firm?
1. An industrial plant is considering the purchase of a centrifugal pump. Three offers were received and basis of selection have been tabulated as follows: Offer A Offer B Offer C Price of pump P60,000 P96,000 P120,000 Economic life, years 3 5 10 Salvage value at end of economic life 5,000 10,000 8,000 Yearly maintenance cost 10,000 6,000 5,000 . If cost of money is 14%, what offer would you recommend to be purchased? Use the rate of return method, the annual cost method, present worth method and equivalent uniform annual cost method for the evaluation Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.