Bramble Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently isn't equipped to do. Estimates regarding each machine are provided below. Original cost Estimated life Salvage value Estimated annual cash inflows Estimated annual cash outflows Click here to view PV tables. Machine A $243,000 8 years -0- $80,000 $35,000 Machine B $317,000 8 years -0- $95,000 $40,000 Calculate the net present value and profitability index of each machine. Assume a 9% discount rate. (Round net present value to the

Bramble Corp. is considering purchasing one of two new diagnostic machines. Either machine would make it possible for the company to bid on jobs that it currently isn't equipped to do. Estimates regarding each machine are provided below. Original cost Estimated life Salvage value Estimated annual cash inflows Estimated annual cash outflows Click here to view PV tables. Machine A $243,000 8 years -0- $80,000 $35,000 Machine B $317,000 8 years -0- $95,000 $40,000 Calculate the net present value and profitability index of each machine. Assume a 9% discount rate. (Round net present value to the

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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. A manager has been presented with two proposals for automating a production process. Proposal A involves an initial cost of $15,000 and an annual operating costof $2,000 per year for the next 4 years. Thereafter, the operating cost is expected to increase by $100 per year. This equipment is expected to have a 10-year life with no salvage value.Proposal B requires an initial investment of $28,000 and an annual operating cost of $1,200 per year for the first 3 years. Thereafter, theoperating cost is expected to increase by $120 per year. This equipment is expected to last for 20 years and will have a $2,000 salvage value. If the company's minimum attractive rate of return is 10%, which proposal should be accepted on the basis of present worth analysis?
5.
A corporation uses a type of motor truck which costs P 250,000, with life of 2 years and final salvage value P 40,000. If money is worth 4% and using the annual cost method, what should be the life, in years, of another type of truck for the same purpose whose that cost P 312,614 with final salvage value P 50,000? Select one: a. 2.5 b. 4 c. 3.5 d. 3
Rerform an EAC analysis and evaluate what decision to make regarding 2 challengers and 1 defender. Elaborate:a) Graphsb) EAC analysisc) Conclude the exercise and make a decision regarding the results Machine N1 (#1 challenger) useful life = 8 years Initial Cost $15,000 MARR 18% Year Operating costs Market value EAC 1 $ 355.00 $ 8,000.00 2 $ 500.00 $ 7,000.00 3 $ 788.00 $ 6,000.00 4 $ 1,000.00 $ 5,000.00 5 $ 1,355.00 $ 4,000.00 6 $ 1,688.00 $ 3,000.00 7 $ 2,012.00 $ 1,000.00 8 $ 2,345.00 $ 0.00
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A $2500 computer system can be leased for $79 per month for 3 years. After 3 years, it can be purchased for $750. This is also the salvage value if the system was purchased originally. What is the effective annual rate for leasing the computer? Ans. i = 1.75% r= 23.10% Show your ful detailed solutions...
You have been asked to perform a sensitivity analysis on a plant modernization plan. The initial investment is $30,000. Expected annual savings is $13,000. Salvage value is $7,000 after a 7 year planning horizon. The MARR is 12%. Determine the AW if the annual savings change by the following percentages from the initial estimate: b. -80%c. -60%d. -40%e. -20%f. +20%g. +40%h. Determine the percentage change in net annual savings that causes a reversal in the decision regarding the attractiveness of the project
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kuzukuzu12121@outlook.com just sent here I NEED EXCEL FİLE. Determine the NPW, AW, FW and IRR of the following engineering project. Initial Cost ($400,000) The Study Period 15 years Salvage (Market) Value of the project 15% of the initial cost Operating Costs in the first year($9,000) Cost Increase 3% per year Benefits in the first year $40,000 Benefit Increase 9% per year MARR 8% per year Is the Project acceptable? WHY?
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