2 Question 8Kermit is considering purchasing a new computer system. The purchase price is $129,645. Kermit will borrow one-fourth of thepurchase price from a bank at 10 percent per year compounded annually. The loan is to be repaid using equal annual paymentsover a 3-year period. The computer system is expected to last 5 years and has a salvage value of $6,474 at that time. Over the 5-year period, Kermit expects to pay a technician $20,000 per year to maintain the system but will save $61,807 per year throughincreased efficiencies. Kermit uses a MARR of 12 percent to evaluate investments. What is the net present worth for this newcomputer system?Enter your answer in this format: 12345>Question 9Consider palletizer at a bottling plant that has a first cost of $151,395, has operating and maintenance costs of $17,215 per year,and an estimated net salvage value of $46,025 at the end of 30 years. Assume an interest rate of 8%. What is the future worth ofthis project?Enter your answer as follow: 123456.78Kermit is considering purchasing a newcomputer system. The purchase price is$129,645. Kermit will borrow one-fourth of thepurchase price from a bank at 10 percent peryear compounded annually. The loan is to berepaid using equal annual payments over a 3-year period. The computer system is expected tolast 5 years and has a salvage value of $6,474 atthat time. Over the 5-year period, Kermitexpects to pay a technician $20,000 per year tomaintain the system but will save $61,807 peryear through increased efficiencies. Kermit usesa MARR of 12 percent to evaluate investments.What is the net present worth for this newcomputer system?

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Kermit is considering purchasing a new computer system. The purchase price is $129,645. Kermit will borrow one-fourth of the purchase price from a bank at 10 percent per year compounded annually. The loan is to be repaid using equal annual payments over a 3- year period. The computer system is expected to last 5 years and has a salvage value of $6,474 at that time. Over the 5-year period, Kermit expects to pay a technician $20,000 per year to maintain the system but will save $61,807 per year through increased efficiencies. Kermit uses a MARR of 12 percent to evaluate investments. What is the net present worth for this new computer system?

Kermit is considering purchasing a new computer system. The purchase price is $129,645. Kermit will borrow one-fourth of the purchase price from a bank at 10 percent per year compounded annually. The loan is to be repaid using equal annual payments over a 3- year period. The computer system is expected to last 5 years and has a salvage value of $6,474 at that time. Over the 5-year period, Kermit expects to pay a technician $20,000 per year to maintain the system but will save $61,807 per year through increased efficiencies. Kermit uses a MARR of 12 percent to evaluate investments. What is the net present worth for this new computer system?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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There is a bar on Off‐Main Street called the Rock‐n‐Roll Bar. All the people that go to that bar like to listen to rock‐n‐roll music, and they love live bands. If the bar owner brings bands in to play music on a Saturday night, she will make a lot of money. However there are tenants in this building who get annoyed by the loud music. The benefits/costs to the owner/tenants of having zero, one, two or three bands on a Saturday night are listed below. Assume the bar owner has the right to hire as many bands as she likes. Iftransaction costs were $90, split between the bar owner and the tenants, how manybands would play? What would social welfare be? A. Three bands would play and social welfare would be ‐100.B. Two bands would play and social welfare would be 75.C. Two bands would play and social welfare would be ‐15.D. No bands would play and social welfare would be 0.E. Three bands would play and social welfare would be ‐190
There is a bar on Off‐Main Street called the Rock‐n‐Roll Bar. All the people that go to that bar like to listen to rock‐n‐roll music, and they love live bands. If the bar owner brings bands in to play music on a Saturday night, she will make a lot of money. However there are tenants in this building who get annoyed by the loud music. The benefits/costs to the owner/tenants of having zero, one, two or three bands on a Saturday night are listed below. If the tenants have the right to be free of loud music enforced through aproperty rule, how many bands will play in Rock‐n‐Roll Bar on a Saturday night? A. ZeroB. OneC. TwoD. ThreeE. It depends on transaction costs
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