Kiwidale Dairy is considering purchasing a new ice-cream maker. Two models, Smoothie and Creamy, are available and their information is given below (all costs and profits are in dollars): First Cost Service Life Annual Profit Annual Operating Cost Salvage Value Smoothie 12,000 14 Years 4,350 950 2,200 Creamy 33,000 12 Years 10,950 3,375 5,200 Which alternative is better if the MARR for Kiwidale Dairy is 17.9%. (Perform all calculations using 5 significant figures and round any monetary answers to the nearest cent}. What is the Annual Worth of the Smoothie Model? Number What is the Annual Worth of the Creamy Model? Number Which model would you choose (note that the answer is case sensitive)?

Kiwidale Dairy is considering purchasing a new ice-cream maker. Two models, Smoothie and Creamy, are available and their information is given below (all costs and profits are in dollars): First Cost Service Life Annual Profit Annual Operating Cost Salvage Value Smoothie 12,000 14 Years 4,350 950 2,200 Creamy 33,000 12 Years 10,950 3,375 5,200 Which alternative is better if the MARR for Kiwidale Dairy is 17.9%. (Perform all calculations using 5 significant figures and round any monetary answers to the nearest cent}. What is the Annual Worth of the Smoothie Model? Number What is the Annual Worth of the Creamy Model? Number Which model would you choose (note that the answer is case sensitive)?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Texas Popcorn Corporation is planning to fully automate it process. The company CEO is currently looking into three options. Options A costs $450,000, AOC of $55,000, and salvage value of $85,000 after 3 years. Option B will cost $720,000 with an AOC of $68,000 and salvage of $95,000 after 4 years. Option C cost $800,000 with an AOC of $95,000 and salvage of $125,000 after 6 years. Which machine should the company select at an interest rate of 10% per year? Assume the project service life is 15 years. Please provide handwritten solutions.
An equipment costing $57,500 is being considered for a production process at Dewey Chemicals. The expected benefits per year is $4,500 and estimated salvage value is $10,000. Determine the rate of return the company can get in this equipment proposal. Equipment life = 15 years.
If you could write out the equation once for me to see where the values should go, that would be helpful. Thank you!
Please provide handwritten solutions.
Two traffic signal systems are being considered for an intersection. One system costs $31,000 for installation and has an efficiency rating of 80%, requires 26 kW power (output), incurs a user cost of $0.23 per vehicle, and has a life of 9 years. A second system costs $47,000 to install, has an efficiency rating of 87%, requires 34 kW power (output), has a user cost of $0.19 per vehicle, and has a life of 17 years. Annual maintenance costs are $75 and $95, respectively. MARR = 8% per year. How many vehicles must use the intersection to justify the second system when electricity costs $0.09/kWh? Assume salvage value for each system equals zero. Project the difference in the user cost as savings for the second system. There are approximately 8,760 hours/year. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year. At least 108000 vehicles per day must use the intersection to justify the second system. (Round up to the nearest whole…
A company purchases manufacturing equipment for $ 3,950,000. The company produces 1,800 units of production per year. The revenue associated with each production unit is $ 1,310. The total annual costs per production unit is $ 630. a) What is the non-discounted payback period? b) What is the payback period if MARR = 20.00% Answer to part b) can be within a 1 year range.
am. 117.
Texas Popcorn Corporation is planning to fully automate it process. The company CEO is currently looking into three options. Options A costs $450,000, AOC of $55,000, and salvage value of $85,000 after 3 years. Option B will cost $720,000 with an AOC of $68,000 and salvage of $95,000 after 4 years. Option C cost $800,000 with an AOC of $95,000 and salvage of $125,000 after 6 years. Which machine should the company select at an interest rate of 10% per year? Use annual worth analysis. Assume the project service life is 12 years. Please provide hand written solution.