Economics Compare two CNC machines, A and B, on the basis of a present worth evaluation, and select the best alternative using i- 10% per year and a study period of 6 years. Alternative First cost, $ Annual operating cost, $/year Major Maintenance in year 4, S Salvage value, $ B -15,000 -28,000 -6,000 -9,000 -2000 3,000 5,000 Life, years Market value for machine A, at year 6 is 4,000, and 7,000 for machine O -15,000 - 6000(P/A,106,6) - 12,000(P/F,10%,4) + 4000(P/F,1096,6)= S- 57,069.82; Select machine A O 15,000 - 6000(P/A,106,6) - 12,000(P/F,10%,4) + 4000(P/F,1096,6) = 5-47,069.82; Select machine A O 28,000 - 9000(P/A,106,6) - 2000(P/F, 1096,4) - 7000(P/F,10%,6) = 5-81,445.86; Select machine B O 28,000 - 9000(P/A 106,6) - 2000(P/F, 106,4) - 7000o(P/F,10%,6)= S-64,612.05; Select machine B

Economics Compare two CNC machines, A and B, on the basis of a present worth evaluation, and select the best alternative using i- 10% per year and a study period of 6 years. Alternative First cost, $ Annual operating cost, $/year Major Maintenance in year 4, S Salvage value, $ B -15,000 -28,000 -6,000 -9,000 -2000 3,000 5,000 Life, years Market value for machine A, at year 6 is 4,000, and 7,000 for machine O -15,000 - 6000(P/A,106,6) - 12,000(P/F,10%,4) + 4000(P/F,1096,6)= S- 57,069.82; Select machine A O 15,000 - 6000(P/A,106,6) - 12,000(P/F,10%,4) + 4000(P/F,1096,6) = 5-47,069.82; Select machine A O 28,000 - 9000(P/A,106,6) - 2000(P/F, 1096,4) - 7000(P/F,10%,6) = 5-81,445.86; Select machine B O 28,000 - 9000(P/A 106,6) - 2000(P/F, 106,4) - 7000o(P/F,10%,6)= S-64,612.05; Select machine B

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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