Compare the alternatives shown on the basis of their capitalized costs using a MARR of 10% per year.AlternativeFirst cost, $Annual operating cost, $ peryearSalvage value, $Life, yearsM-155,000-30,0008,0005N-875,000-11,0001,000,00000The capitalized cost for alternative M is $-The best alternative selected on the basis of their capitalized costs is alternative Mand the capitalized cost for alternative N is $-

The Minimum Attractive Rate of Return (MARR), additionally recognized as the hurdle charge or…

Compare the alternatives shown on the basis of their capitalized costs using a MARR of 10% per year. Alternative First cost, $ Annual operating cost, $ per year Salvage value, $ Life, years The capitalized cost for alternative M is $- The best alternative selected on the basis of their capitalized costs is alternative M M -155,000 -30,000 8,000 5 N -875,000 -11,000 1,000,000 00 and the capitalized cost for alternative N is $-

Compare the alternatives shown on the basis of their capitalized costs using a MARR of 10% per year. Alternative First cost, $ Annual operating cost, $ per year Salvage value, $ Life, years The capitalized cost for alternative M is $- The best alternative selected on the basis of their capitalized costs is alternative M M -155,000 -30,000 8,000 5 N -875,000 -11,000 1,000,000 00 and the capitalized cost for alternative N is $-

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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An IE works in the automation department of a surgical equipment manufacturing company that produces specially ordered equipment for hospitals. To upgrade the quality of the assembly process of the camera used in laparoscopic surgery probes, two approaches are available: make and buy. The make alternative has an initial equipment cost of $175,000, a life of 5 years, a $25,000 salvage value, a processing cost of $3,000 per camera, and an M&O cost of $90,000. The buy alternative requires contracting the assembly operation externally at a cost of $7,250 per camera. If the MARR is 12% per year, how many cameras per year must be assembled to justify the make alternative? 27 cameras must be assembled per year to justify the make alternative.
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