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How can the economic life of the challenger be determined?
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- Management of Plascencia Corporation is considering whether to purchase a new model 370 machine costing $464,000 or a new model 220 machine costing $405,000 to replace a machine that was purchased 10 years ago for $439,000. The old machine was used to make product 143L until it broke down last week. Unfortunately, the old machine cannot be repaired. Management has decided to buy the new model 220 machine. It has less capacity than the new model 370 machine, but its capacity is sufficient to continue making product 143L. Management also considered, but rejected, the alternative of simply dropping product 143L. If that were done, instead of investing $405,000 in the new machine, the money could be invested in a project that would return a total of $456,000. In making the decision to invest in the model 220 machine, the opportunity cost was:Please no written by hand solutionKomatsu Cutting Technologies is considering replacing one of its CNC machines with one that is newer and more efficient. The firm purchased the CNC machine 10 years ago at a cost of $150,000. The machine had an expected economic life of 12 years at the time of purchase and an expected salvage value of $12,000 at the end of the 12 years. The original salvage estimate is still good, and the machine has a remaining useful life of 2 years. The firm can sell this old machine now to another firm in the industry for $35,000. A new machine can be purchased for $175,000, including installation costs. It has an estimated useful (economic) life of 8 years. The new machine is expected to reduce the cash operating expenses by $30,000 per year over its 8-year life, at the end of which the machine is estimated to be worth only $5000. The company has a MARR of 12%. The asset is classified as a Class 43 Property with a CCA rate of %30. The firm's marginal tax rate is 40%. Compute the cash flows…
- Sh27The replacement of a laser cutting machine is being considered. The best available machine on market has an estimated economic life of 12 years with an equivalent annual worth of S-22,800. The current used machine, which was bought three years ago for $36, 000, has a present market value of 54,000 with the following data for the next three years: Estimated Market Value Year S per Year at End of Year., S 20,000 3,000 25.000 2,500 3 30.000 2.000 Select when to replace the machine, using Economic Service Life method at an interest rate of 4% per year, O Replace now O Replace in year one O Replace in year two O Replace in year threeSecond time submiting this problem, please help!........ Please provide steps by step answer with proper explanation with final answer.....
- 34 - Which of the following is incorrect regarding the economic life statement?A) It means economic service year.B) Operating costs do not increase with the wear and tear of machines.C) It is time to retire.D) The machine's service life is over.E) It means it's time to be taken out of service.SUBJECT: Engineering Economics Number 5The Blank 1 cost is the capital required for most of the activities in the acquisition phase. Blank 1 Add your answer
- LUML has just received an order for 500 fixtures. LUML has decided to accept the order. These will be produced under lot 2022-12 (order number 12 for 2022). There has been some concern recently about the ability to identify problems in production. At the end of the production process, before packing each fixture is inspected by a person from the “quality control office”. For Lot 2022-12, arrangements have been made to record any problem units that the inspection finds. The nature of the problem will also be recorded. (Somewhat surprisingly, keeping track has not been done before.) They expect that the units will be produced in a run that should last about a week. Once the run has been completed, the data on problem units will be sent to you. You are to run an analysis and summarize your results. Some detailed questions will be developed and sent over to you. And you can use your own expertise to develop any other work that you think would be useful. The expected production run is the…Question 2 With the estimates shown below, Sarah needs to determine the trade-in (replacement) value of machine X that will render its AW equal to that of machine Y at an interest rate of 10% per year. Determine the replacement value. Machine X Machine Y Market Value, $ ? 87,000 Annual Cost, $ per Year −58,000 −40,000 for year 1,increasing by 2000 per year thereafter. Salvage Value 16,500 21,000 Life, Years 3 5 The replacement value is $ . Full explain this question and text typing work only thanksChatham Automotive purchased new electric forklifts to move steel automobile parts two years ago. These cost $75 000 each, including the charging stand. In practice, it was found that they did not hold a charge as long as claimed by the manufacturer, so operating costs are very high. This also results in their currently having a salvage value of about $10 000. Chatham is considering replacing them with propane models. The new ones cost $58000. After one year, they have a salvage value of $40 000, and thereafter decline in value at a declining-balance depreciation rate of 20 percent, as does the electric model from this time on. The MARR is 8 percent. Operating costs for the electric model are $20 000 over the first year, rising by 12 percent per year. Operating costs for the propane model will initially be $10 000 over the first year, rising by 12 percent per year. Should Chatham Automotive replace the forklifts now?
