For some years, Mel has contracted with several major pizza retailersfor home delivery services. He uses a MARR of 12% per year in allbusiness dealings. His current van, purchased 10 years ago for$75,000, can be used for 3 more years, with an AOC of $23,000 andan estimated $25,000 trade-in value. A better-equipped van will cost$130,000, have an economic life of 6 years, an estimated trade-in valueof $45,000, an AOC of $32,000 per year, and will generate anestimated $35,000 per year additional revenue. On the basis of theseestimates, what market value now for the current van will make thenew van equally attractive? Solve by spreadsheet or factors, asrequested by your instructor.On equating the AW values of the current van and the new van, tocalculate the market value now for the current van, the spreadsheettool that should be used is GOAL SEEKThe market value now for the current van that will make the new vanequally attractive will be $

Part 2: Explanation:Step 1: Calculate the present worth of the new van: - Calculate the present…

Answered: For some years, Mel has contracted with…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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New microelectronics testing equipment was purchased 2years ago by Mytesmall Industries at a cost of $600,000. Atthat time, it was expected to be used for 5 years and thentraded or sold for its salvage value of $75,000. Expandedbusiness in newly developed international markets is forcingthe decision to trade now for a new unit at a cost of$800,000. The current equipment could be retained, ifnecessary, for another 2 years, at which time it would have a$5000 estimated market value. The current unit is appraisedat $350,000 on the international market, and if it is used foranother 2 years, it will have M&O costs (exclusive ofoperator costs) of $125,000 per year. Determine the valuesof P, n, S, and AOC for this defender if a replacementanalysis were performed today. P = market value =$350,000AOC = $125,000 per yearn = 2 yearsS = $5,000
The Bureau of Public Highways is considering possible types of road surfacing with cost estimates per kilometer: Type B P650k First Cost Resurfacing period Resurfacing Cost Type A P500k 8 years P200k Average annual maintenance cost P15k The periodic resurfacing do not include the base of the subgrade. Compare these types by calculating the present worth for 24 year service, with no salvage value at the end of this time using interest rate of 10%. What if Capitalized Cost is used, which is better? 12 years P250k P20k
If the MARR=10%, compute the value of X that makes the alternatives equally desirable. Do not use spreadsheets. Alternatives Machine A Machine B First cost $12,000 $20,000 Annual Operating cost $1,400/year X Salvage value $2,000 $3,000 Life 4 years 8 years
No AI answershould not found plagiarism in your answer
Don't use Excel and pen or paper
A road resurfacing project costs $250,000, lasts 5 years and saves $150,000 annually in patching costs. MARR is 12%. Determine the annual worth (in $)
A contractor has a 4-year concrete mixer whose first cost was $6,000, having 3 more years to live before being scrapped and sold at $801. Itcould now be sold for $11,922. It has an annual cost for operation and maintenance of $9,352. Its replacement is being proposed with a newmachine whose first cost will be $8,000 having a life of 9 years and salvage value $1,600. It has an operating cost of $800 per year andmaintenance cost of $320 per year. Ifthe interest is 20% cpd-a, what is the Annual Equivalent Cost of the Old Machine? 14,792
The first cost of an electric rebar bender is P355,000 and a salvage value of P50,000 at the end of its life for 5 years. Money is worth 4.3% annually. If there is no salvage value and the annual maintenance cost is P19,000, find the annual cost of perpetual service
do fast i will 10 upvotes.
A machine cost P 300,000 and will have a scrap value of P 50,000 when retired at the end of 15 years. If money is worth 5%, what is the capitalize cost?
Required information A remotely located air sampling station can be powered by solar cells or by running an above ground electric line to the site and using conventional power. Solar cells will cost $16,000 to install and will have a useful life of 5 years with no salvage value. Annual costs for inspection, cleaning, and other maintenance issues are expected to be $2,500. A new power line will cost $22,500 to install, with power costs expected to be $1,000 per year. Since the air sampling project will end in 5 years, the salvage value of the line is considered to be zero. NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. At an interest rate of 10% per year and using an AW analysis, which alternative should be selected? The annual worth of installing solar cells is $- 25477 The alternative to be selected is installing solar cells and the annual worth of installing a new power line is $- 26291 Ⓡ
S Required information A remotely located air sampling station can be powered by solar cells or by running an above ground electric line to the site and using conventional power. Solar cells will cost $16,800 to install and will have a useful life of 5 years with no salvage value. Annual costs for inspection, cleaning, and other maintenance issues are expected to be $2,900. A new power line will cost $24,500 to install, with power costs expected to be $1,000 per year. Since the air sampling project will end in 5 years, the salvage value of the line is considered to be zero. NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. At an interest rate of 10% per year and using an AW analysis, which alternative should be selected? The annual worth of installing solar cells is $- a new power line is $- The alternative to be selected is (Click to select) and the annual worth of installing

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