1) A ski resort wishes to evaluate two alternative machines for ski and board tuning. Select the best alternative using the AWmethod at 6% per year.Machine R Machine SAnnual operating cost, $ per year-40.000-50,000Life, years3Salvage value, $20.000

Annual Worth (AW) Analysis is defined as the equivalent uniform annual worth of all estimated…

Answered: First cost, $ Annual operating cost, $…

First cost, $ Annual operating cost, $ per year Life, years Salvage value, $ Machine R -250,000 -40,000 4 20,000 Machine S -370.500 -50,000 3 20,000

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The figure below shows graphs of the fixed cost function, total cost function and the total revenue function for a certain commodity. 20 8000 7000 6000 5000 4000 Dollars ($) 3000 2000 1000 -10 -1000+ 10 20 30 40 Units (a) What is the break-even point? (x,y) e.g. (295,7650) (b) What are the fixed costs? $ TR Percent of capacity= 50 60 TC If the selling price per unit is $50, and the variable cost per unit is $40: FC 70 80 90 100 enter the answer in the form (c) If the maximum production capacity of the commodity is 110, express the break-even units as a percent of capacity? % (round to two decimal places if necessary)
A city engineer is considering two alternatives for the local water supply. Make a present-worth comparison of the equal-service machines for which the cost are shown below, if i-10% per year. %3! TYPE A TYPE B First cost, P Annual operating cost (AOC) 900 Salvage value, SV Life, years $3000 $4000 700 350 200 15 Which alternative machine should be selected and why?
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Tandem Bikes manufactures exercise bicycles built for two. It sells a cycle for $196 (custom painted in your color choice). The costs associated with Tandem's production are: Fixed costs (per year) Administrative labor $50000 Variable Costs per bike Materials $30 Mfg. Labor Assembly labor Packing material Packing labor Shipping cost ТОTAL Utilities 5000 24 Plant Overhead 65000 $120000 8 3 ТOTAL Note: this is $10000 per month. 10 $77 1. Find the monthly breakeven quantity using the above data. 2. Express monthly breakeven dollar sales (using the quantity calculated in #1). 3. The cost of utilities doubles (annual fixed costs are now $125000 which is $10416.67 per month). What is the new monthly breakeven quantity? 4. What is the Contribution Margin Ratio (CMR), using the costs used in #3? 5. You believe you can sell only 80 bikes a month. Using the costs from #3, what price must be charged per bike to break even selling only 80 bikes per month? 6. Using the original selling price of…
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Method of full coating is taking into account a. Only direct costs and respective contribution margin b. All costs including fixed and variable costs c. Only direct costs and respective gross margin d. Total sum of fixed costs,but only a paid amount of variable cos
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BVM manufactured and sold 25,000 small statues this past year. At that volume, the firm was exactly in a breakeven situation in terms of profitability. BVM’s unit costs are expected to increase by 30% next year. What additional information is needed to determine how much the production volume/sales would have to increase next year to just break even in terms of profitability? (a) Costs per unit (b) Sales price per unit and costs per unit (c) Total fixed costs, sales price per unit, and costs per unit (d) No data is needed, the volume increase is 25, 000 + 25, 000(0.30) = 32, 500 units.
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