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Chatham Automotive [should/should not] replace the forklifts now since the minimum total EAC for the electric forklifts is $ [blank] which is [lower/higher] than $ [blank], the minimum total EAC for the propane forklifts.

Chatham Automotive [should/should not] replace the forklifts now since the minimum total EAC for the electric forklifts is $ [blank] which is [lower/higher] than $ [blank], the minimum total EAC for the propane forklifts.

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Chatham Automotive [should/should not] replace the forklifts now since the minimum total EAC for the electric forklifts is $ [blank] which is [lower/higher] than $ [blank], the minimum total EAC for the propane forklifts.

i = 8% N PER 8 GAA www ww ND NN NN NOONG GAWN 24 26 32 33 34 35 40 50 55 90 Single Payment 95 100 Compound Amount Factor (F/P,i,N) 1.0800 1.1664 1.2597 1.3605 1.4693 1.5869 1.7138 1.8509 1.9990 2.1589 2.3316 2.5182 2.7196 2.9372 3.1722 3.4259 3.7000 3.9960 4.3157 4.6610 5.0338 5.4365 5.8715 6.3412 6.8485 7.3964 7.9881 8.6271 9.3173 10.063 60 101.26 65 148.78 70 218.61 75 321.20 80 471.95 693.46 1018.9 1497.1 2199.8 85 10.868 11.737 12.676 13.690 14.785 21.725 31.920 46.902 68.914 Present Worth Factor 0.54027 0.50025 0.46319 (P/F,i,N) (A/F,i,N) (F/A,i,N) 0.92593 1.0000 1.0000 0.85734 0.48077 2.0800 0.79383 0.30803 3.2464 0.22192 4.5061 0.73503 0.68058 0.17046 5.8666 0.63017 0.13632 0.58349 0.11207 0.09401 0.08008 0.06903 0.42888 0.39711 0.36770 0.34046 0.31524 0.29189 0.27027 0.25025 0.23171 0.21455 0.13520 0.12519 0.11591 0.10733 0.09938 0.09202 0.08520 0.07889 0.07305 0.06763 Discrete Compounding, Discrete Cash Flows Uniform Series 0.19866 0.01983 0.18394 0.01803 0.17032 0.01642 0.15770 0.01498 0.14602 0.01368 0.04603 0.03133 0.02132 0.01451 Sinking Fund Factor 0.00988 0.00672 0.00457 0.00311 0.06008 0.05270 0.04652 0.04130 0.03683 0.03298 0.02963 0.02670 0.02413 0.02185 0.01251 0.01145 0.01049 0.00962 0.00883 0.00811 0.00745 0.00685 0.00630 0.00580 0.00386 0.00259 Uniform Series Factor 0.00174 0.00118 7.3359 8.9228 10.637 12.488 14.487 16.645 18.977 21.495 24.215 27.152 30.324 33.750 37.450 41.446 45.762 50.423 55.457 60.893 66.765 73.106 79.954 87.351 95.339 103.97 113.28 123.35 134.21 145.95 158.63 172.32 259.06 386.51 573.77 848.92 0.00080 1253.2 0.00054 1847.2 0.00037 2720.1 0.00025 4002.6 0.00212 0.00017 5886.9 0.00144 0.00012 8655.7 0.00098 0.00008 12724.0 0.00067 0.00005 18702.0 0.00045 0.00004 27485.0 Capital Recovery Factor (A/P,i,N) 1.0800 0.56077 0.38803 0.30192 0.25046 0.21632 0.19207 0.17401 0.16008 0.14903 0.14008 0.13270 0.12652 0.12130 0.11683 0.11298 0.10963 0.10670 0.10413 0.10185 0.09983 0.09803 0.09642 0.09498 0.09368 0.09251 0.09145 0.09049 0.08962 0.08883 0.08811 0.08745 0.08685 0.08630 0.08580 0.08386 0.08259 0.08174 0.08118 0.08080 0.08054 0.08037 0.08025 0.08017 0.08012 0.08008 0.08005 0.08004 Series Present Worth Factor (P/A,i,N) 0.92593 1.7833 2.5771 3.3121 3.9927 4.6229 5.2064 5.7466 6.2469 6.7101 7.1390 7.5361 7.9038 8.2442 8.5595 8.8514 9.1216 9.3719 9.6036 9.8181 10.017 10.201 10.371 10.529 10.675 10.810 10.935 11.051 11.158 11.258 11.350 11.435 11.514 11.587 11.655 11.925 12.108 12.233 12.319 12.377 12.416 12.443 12.461 12.474 12.482 12.488 12.492 12.494 Arithmetic Gradient Series Factor (A/G,i,N) 0.00000 0.48077 0.94874 1.4040 1.8465 2.2763 2.6937 3.0985 3.4910 3.8713 4.2395 4.5957 4.9402 5.2731 5.5945 5.9046 6.2037 6.4920 6.7697 7.0369 7.2940 7.5412 7.7786 8.0066 8.2254 8.4352 8.6363 8.8289 9.0133 9.1897 9.3584 9.5197 9.6737 9.8208 9.9611 10.570 11.045 11.411 11.690 11.902 12.060 12.178 12.266 12.330 12.377 12.412 12.437 12.455
Transcribed Image Text:i = 8% N PER 8 GAA www ww ND NN NN NOONG GAWN 24 26 32 33 34 35 40 50 55 90 Single Payment 95 100 Compound Amount Factor (F/P,i,N) 1.0800 1.1664 1.2597 1.3605 1.4693 1.5869 1.7138 1.8509 1.9990 2.1589 2.3316 2.5182 2.7196 2.9372 3.1722 3.4259 3.7000 3.9960 4.3157 4.6610 5.0338 5.4365 5.8715 6.3412 6.8485 7.3964 7.9881 8.6271 9.3173 10.063 60 101.26 65 148.78 70 218.61 75 321.20 80 471.95 693.46 1018.9 1497.1 2199.8 85 10.868 11.737 12.676 13.690 14.785 21.725 31.920 46.902 68.914 Present Worth Factor 0.54027 0.50025 0.46319 (P/F,i,N) (A/F,i,N) (F/A,i,N) 0.92593 1.0000 1.0000 0.85734 0.48077 2.0800 0.79383 0.30803 3.2464 0.22192 4.5061 0.73503 0.68058 0.17046 5.8666 0.63017 0.13632 0.58349 0.11207 0.09401 0.08008 0.06903 0.42888 0.39711 0.36770 0.34046 0.31524 0.29189 0.27027 0.25025 0.23171 0.21455 0.13520 0.12519 0.11591 0.10733 0.09938 0.09202 0.08520 0.07889 0.07305 0.06763 Discrete Compounding, Discrete Cash Flows Uniform Series 0.19866 0.01983 0.18394 0.01803 0.17032 0.01642 0.15770 0.01498 0.14602 0.01368 0.04603 0.03133 0.02132 0.01451 Sinking Fund Factor 0.00988 0.00672 0.00457 0.00311 0.06008 0.05270 0.04652 0.04130 0.03683 0.03298 0.02963 0.02670 0.02413 0.02185 0.01251 0.01145 0.01049 0.00962 0.00883 0.00811 0.00745 0.00685 0.00630 0.00580 0.00386 0.00259 Uniform Series Factor 0.00174 0.00118 7.3359 8.9228 10.637 12.488 14.487 16.645 18.977 21.495 24.215 27.152 30.324 33.750 37.450 41.446 45.762 50.423 55.457 60.893 66.765 73.106 79.954 87.351 95.339 103.97 113.28 123.35 134.21 145.95 158.63 172.32 259.06 386.51 573.77 848.92 0.00080 1253.2 0.00054 1847.2 0.00037 2720.1 0.00025 4002.6 0.00212 0.00017 5886.9 0.00144 0.00012 8655.7 0.00098 0.00008 12724.0 0.00067 0.00005 18702.0 0.00045 0.00004 27485.0 Capital Recovery Factor (A/P,i,N) 1.0800 0.56077 0.38803 0.30192 0.25046 0.21632 0.19207 0.17401 0.16008 0.14903 0.14008 0.13270 0.12652 0.12130 0.11683 0.11298 0.10963 0.10670 0.10413 0.10185 0.09983 0.09803 0.09642 0.09498 0.09368 0.09251 0.09145 0.09049 0.08962 0.08883 0.08811 0.08745 0.08685 0.08630 0.08580 0.08386 0.08259 0.08174 0.08118 0.08080 0.08054 0.08037 0.08025 0.08017 0.08012 0.08008 0.08005 0.08004 Series Present Worth Factor (P/A,i,N) 0.92593 1.7833 2.5771 3.3121 3.9927 4.6229 5.2064 5.7466 6.2469 6.7101 7.1390 7.5361 7.9038 8.2442 8.5595 8.8514 9.1216 9.3719 9.6036 9.8181 10.017 10.201 10.371 10.529 10.675 10.810 10.935 11.051 11.158 11.258 11.350 11.435 11.514 11.587 11.655 11.925 12.108 12.233 12.319 12.377 12.416 12.443 12.461 12.474 12.482 12.488 12.492 12.494 Arithmetic Gradient Series Factor (A/G,i,N) 0.00000 0.48077 0.94874 1.4040 1.8465 2.2763 2.6937 3.0985 3.4910 3.8713 4.2395 4.5957 4.9402 5.2731 5.5945 5.9046 6.2037 6.4920 6.7697 7.0369 7.2940 7.5412 7.7786 8.0066 8.2254 8.4352 8.6363 8.8289 9.0133 9.1897 9.3584 9.5197 9.6737 9.8208 9.9611 10.570 11.045 11.411 11.690 11.902 12.060 12.178 12.266 12.330 12.377 12.412 12.437 12.455
Chatham Automotive purchased new electric forklifts to move steel automobile parts two years ago. They cost $65,000 each, including the charging stand. In practice, it was found that they did not hold a charge as long as claimed by the manufacturer, so operating costs are very high. As a result, their current salvage value is about $10,000. Chatham is considering replacing them with propane models. New propane forklifts cost $57,000 each. After one year, they have a salvage value of $40,000, and thereafter decline in value at a declining-balance depreciation rate of 20 percent, as does the electric model from this time on. The MARR is 8 percent. Operating costs for the electric model will be $20,000 this year, rising by 13 percent per year. Operating costs for the propane model will initially be $12,000 over the first year, rising by 13 percent per year. Should Chatham Automotive replace the forklifts now?
Transcribed Image Text:Chatham Automotive purchased new electric forklifts to move steel automobile parts two years ago. They cost $65,000 each, including the charging stand. In practice, it was found that they did not hold a charge as long as claimed by the manufacturer, so operating costs are very high. As a result, their current salvage value is about $10,000. Chatham is considering replacing them with propane models. New propane forklifts cost $57,000 each. After one year, they have a salvage value of $40,000, and thereafter decline in value at a declining-balance depreciation rate of 20 percent, as does the electric model from this time on. The MARR is 8 percent. Operating costs for the electric model will be $20,000 this year, rising by 13 percent per year. Operating costs for the propane model will initially be $12,000 over the first year, rising by 13 percent per year. Should Chatham Automotive replace the forklifts now?
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