From the data shown, determine the ESL of the asset. (Note: Values in the table are AW values, not individual year end values.)AW of First Cost, $AW of Salvage Value, $AW of Operating Cost, $-4800016400099,000-3600038,0954700018,127-530006464490003276Years Retained12345The ESL of the asset isyear(s).-148000-162000134000154000

Depreciation refers to the tearing or reduction in the value of the asset over time. Every fixed…

From the data shown, determine the ESL of the asset. (Note: Values in the table are AW values, not individual year-end values.) Years Retained AW of First Cost, $ AW of Salvage Value, $ AW of Operating Cost. S -48000 164000 99,000 -148000 -36000 38,095 -162000 47000 18,127 134000 -53000 6464 49000 3276 1 2 3 4 5 The ESL of the asset is year(s). 154000

From the data shown, determine the ESL of the asset. (Note: Values in the table are AW values, not individual year-end values.) Years Retained AW of First Cost, $ AW of Salvage Value, $ AW of Operating Cost. S -48000 164000 99,000 -148000 -36000 38,095 -162000 47000 18,127 134000 -53000 6464 49000 3276 1 2 3 4 5 The ESL of the asset is year(s). 154000

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 Briggs and Stratton Commercial Division designs and manufacturers small engines for golf turf maintenance equipment. A robotics-based testing system with support equipment will ensure that their new signature guarantee program entitled "Always Insta-Start" does indeed work for every engine produced. First cost of equipment AOC per Year Salvage Value Estimated Life Pull System $-1,800,000 $-620,000 $90,000 8 years Push System $-2,500,000 $-640,000 $130,000 8 years Determine the salvage value for the push system that will make the company indifferent to the two systems. Also, MARR = 13% per year. The salvage value for the push system is determined to be $ in $1000 units.
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Determine the ESL, at i = 15% per year for equipment that has a first cost of $8,000 and the estimated operating costs and year-end salvage values shown below Year Operation Cost Salvage Value $ per Year $ 1 -1000 2 -1200 3 -1300 4 -2100 1 year 2 years 3 years 4 years 6000 5000 3000 2000
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2. One year ago, a machine was purchased at a cost of $2,000, to be used for 6 years.However, the machine has failed to perform properly and has a cost of $500 per year forrepairs, adjustments, and shutdowns. A new machine is available to accomplish thefunctions desired and has an initial cost of $3,500. Its maintenance costs are expected tobe $50 per year during its service of 5 years. The approximate market value of the presentmachine has been roughly $1,200. If the operating cost (other than maintenance) for bothmachines are equal, show whether it is economical to purchase the new machine. Performa before-tax study, using an interest rate of 12% and assume that the salvage values will benegligible.