K An old forklift is due for a replacement analysis. It has a current market value $10,000. The market values and operation and maintenance costs for each of the remaining years of service are given below. The MARR is 17% per year. (a) Complete the table of marginal costs of the old forklift for each of the remaining years of service. (b) If the challenger has a minimum EUAC of $7,415, answer the two additional questions. Year 1 (a) Fill in the table below. (Round to the nearest dollar.) Forklift (Defender) MV at EOY $6,000 5,000 4,000 2,000 Click the icon to view the interest and annuity table for discrete compounding when MARR = 17% per year. Year 1 2 3 4 O&M Costs COL $4,000 4,000 4,500 5,500 Marginal Cost $

K An old forklift is due for a replacement analysis. It has a current market value $10,000. The market values and operation and maintenance costs for each of the remaining years of service are given below. The MARR is 17% per year. (a) Complete the table of marginal costs of the old forklift for each of the remaining years of service. (b) If the challenger has a minimum EUAC of $7,415, answer the two additional questions. Year 1 (a) Fill in the table below. (Round to the nearest dollar.) Forklift (Defender) MV at EOY $6,000 5,000 4,000 2,000 Click the icon to view the interest and annuity table for discrete compounding when MARR = 17% per year. Year 1 2 3 4 O&M Costs COL $4,000 4,000 4,500 5,500 Marginal Cost $

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 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 three
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Below are the costs and revenues of 2 alternatives for a machine. When the discount rate is 26.5% per year, determine which alternative is economically viable using the annual value method. 1. Machine 2. Machine Initial investment expense $1,400,000 $1,170,000 Scrap price $280,000 $175,500 First year value of annual operating expense $60,000 $28,000 Annual increase rate of operating expenses %23 %26 Annual revenue $720,000 $630,000 Annual revenue change 8 years fixed, then descending linearly 7 years fixed, then geometricdecreasing Annual reduction rate of revenues or quantity $3,500 -%6 Economic Life 20 years 15 years Below are the costs and revenues of 2 alternatives for a machine. When the discount rate is26.5%per year, determine which alternative is economically viable using the annual value
A 5 year-old tooling kit that was purchased new for $9000 has a current market value of $4000 and expected 0&M costs of $3000, increasing by $1200 per year. Future market values are expected to decline by 25% annually (going forward). The kit can be used for another 3 years at most. The optimal replacement kit costs $8000 and has 0&M costs starting at $2500 per year, increasing by $2000 per year. Salvage value for the new kit at the end of the first year is $4000 and falls by $1000 per year thereafter (until zero). The new model kit will be needed indefinitely. Assume a unique minimum AEC~(15%) for both kits (both the current and replacement kit). The MARR is 15%. 1) What is the AECC• ? a) Less than 6925.70 b) 6925.70-6945.70 c) 6945.70-6965.70 ) d) 6965.70-6985.70 e) More than 6985.70
10.7 Determine the economic life of an $800 laptop computer. Your personal interest rate is 10% per year. Annual expenses and year-end resale values are expected to be the following: Year 1 Year 2 Year 3 Software upgrades and maintenance $150 $200 $300 Resale value at end of year $600 $450 $200
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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 thanks
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The following tables show the marginal costs of a defender over its remaining four years of service life. If the challenger's minimum EUAC is $29,403, what is the most appropriate replacement decision? Year 1234 Marginal cost $31,053 $26,353 $28,003 $32,803 ○ A. No decision can be made unless additional calculations are made on the challenger B. Replace the defender now OC. No decision can be made unless additional calculations are made on the defender ○ D. Keep the defender for at least one more year
The replacement of a planning machine is being considered by the Reardorn Furniture Company. (There is an indefinite future need for this type of machine.) The best challenger will cost $32,000 for installation and will have an estimated economic life of 11 years and a $1,800 MV at that time. It is estimated that annual expenses will average $16,000 per year. The defender has a present BV of $6,000 and a present MV of $3500. Data for the defender for the next three years are given below. Using a before-tax interest rate of 12% per year, make a comparison to determine whether it is economical to make the replacement now. MV at End of BV at End of Expenses during Year Year the Year $ - 1,500 $4,500 $18,000 - 2,000 3,000 1 2 22,000 3 - 2,500 1,500 26,000 Click the icon to view the interest and annuity table for discrete compounding when i = 12% per year. Year Fill in the table for the EUAC values for the defender for years 1-3. (Round to the nearest dollar.) Year 1 2 3 EUAC $ $ SA