Five years ago, when the relevant cost index was 120, a nuclear centrifuge cost $40,000. The centrifuge had a capacity of separating 1500 gallons of ionized solution Today, it is desired to build a centrifuge with a capacity of 4500 gallons per hour, but the cost index is now 300. Assuming a power-sizing exponent to reflect economies of scale, x, of .075, us the power-sizing model to determine the approximate cost (expressed in todays dollars) of the new reactor. per hour.

Five years ago, when the relevant cost index was 120, a nuclear centrifuge cost $40,000. The centrifuge had a capacity of separating 1500 gallons of ionized solution Today, it is desired to build a centrifuge with a capacity of 4500 gallons per hour, but the cost index is now 300. Assuming a power-sizing exponent to reflect economies of scale, x, of .075, us the power-sizing model to determine the approximate cost (expressed in todays dollars) of the new reactor. per hour.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Ac [The following information applies to the questions displayed below.] Beacon Company is considering automating its production facility. The initial investment in automation would be $10.76 million, and the equipment has a useful life of 8 years with a residual value of $1,160,000. The company will use straight-line depreciation. Beacon could expect a production increase of 33,000 units per year and a reduction of 20 percent in the labor cost per unit. Production and sales volume Sales revenue Variable costs Direct materials Direct labor Variable manufacturing overhead i Total variable manufacturing costs Contribution margin Fixed manufacturing costs Net operating income Current (no automation) Proposed (automation) 89,000 units 122,000 units Per Per Unit Total Unit $100 $7 $100 Total $ 7 $ 20 $ 20 25 2 9 9 54 $ 46 2 ? $ 51 $ 1,180,000 $ 2,190,000 2 7 Required: 1-a. Complete the following table showing the totals. (Enter your answers in whole dollars, not in millions.) Current (no…
Consider VM * D' * s recent investment in the 3D MRI equipment. While this technology allows the Medical Imagining Center to stay at the forefront of technological developments in the field, it is currently underutilized. How would you propose to treat the new equipment from a costing system standpoint? Let's assume that the operating data of the new 3D MRI machine is the following: Initial Cost = $5, 000, 000 Useful life = 10 years Residual value = 0 Overhead costs (other than depreciation) per year =\$ 250000 Capacity = 2,500 hours / year Current utilization = 500 hours / year
An activated sludge plant of capacity X cost $75 million when it was built in 1995. The detailed cost breakdown is given below. Determine a detailed budget estimate of a new similar plant of a capacity 2X in 2020. The capacity factor is 0.86 for this type of plants. Percent of total cost 5% Index Index Index Cost element (1995) 60 (2013) (2020) 116 Feasibility study and design services Labor Materials Equipment including installation costs 100 30% 150 206 228 48% 125 190 172 202 17% 170 215
An industrial firm uses economic analysis to determine which of two different machines to purchase. Each machine is capable. Each machine is capable of performing the same task in a given amount of time. Assume the MARR=8%. Use the following data for analysis:What is the approximate equivalent uniform annual cost of Machine X?
2. Switching to powder coating technology will reduce the emission of volatile organic carbons (VOCs) for a firm's production process. The initial cost is $300,000 with annual costs of $35,000 and savings of $80,000 per year. The salvage value 10 years from now is projected to be $75,000. What rate of return will the firm make on this investment? Round your answer to the nearest .01 percent.
The most likely outcomes for a particular project are estimated as follows: Unit price: $ $ $300,000 40,000 units per year 70 Variable cost: 50 Fixed cost: Expected sales: However, you recognize that some of these estimates are subject to error. Suppose that each variable may turn out to be either 10% higher or 10% lower than the initial estimate. The project will last for 10 years and requires an initial investment of $2.2 million, which will be depreciated straight-line over the project life to a final value of zero. The firm's tax rate is 21% and the required rate of return is 12%. (For all the requirements, a negative amount should be indicated by a minus sign. Enter your answer in dollars not in millions. Do not round intermediate calculations. Round your answer to the nearest dollar amount.) a. What is project NPV in the best-case scenario, that is, assuming all variables take on the best possible value? b. What is project NPV in the worst-case scenario? a. NPV b. NPV
You are working for a company which wishes you to evaluate the economic feasibility of producing alloy wheels for the automobile market. The important financial parameters for the project are as follows:Capacity: 10,000 wheels per yearVariable Cost: R1,500 per wheelFixed Cost: R20 million per yearCapital Cost: R30 millionSalvage Value: 0Selling Price: R5,000 per wheelDepreciation Period: 10 years (straight-line depreciation)Tax Rate: 40%Interest Rate: 12% (payable on the capital loan; assume the capital itself is not repaid)Minimum Acceptable Rate of Return (MARR): 15%The plant will be constructed in one year, but you will need to borrow the full capital cost at the beginning of year one.Answer the following questions:A. What is the annual revenue?B. What is the annual tax payment?C. What is the NPV for the project?D. What is the IRR?E. Will the company agree to invest in this project? Why?
A manufacturer of automated optical inspection devices is deciding on a project to increase the productivity of the manufacturing processes. The estimated costs for the two feasible alternatives being compared are shown below. Use the internal rate of return (IRR) method to determine which alternative should be selected if the analysis period is 8 years and the company's MARR is 4% per year. Alternative M N Initial costs $30,000 $45,000 Net annual cash flow $4,500 $7,000 Life in years 8 8 (a) IRR of base alternative = (b) IRR of incremental cash flow = (c) Choose Alternative
engineering economics
9 Choose the correct answer below.

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