LATHE A 40,000 5,000 2,000 LATHE B 56,000 7,000 2,800 3.5 12 0.25 First Cost Salvage Value Annual Maintenance Operation, Cost/hour Life, in years Time per part (hours) 4 10 0.40 REQUIRED: Determine the number of machine parts/year that could be produced so that 2 lathes will be equally economical if the MARR is 18%. Use AWM
LATHE A 40,000 5,000 2,000 LATHE B 56,000 7,000 2,800 3.5 12 0.25 First Cost Salvage Value Annual Maintenance Operation, Cost/hour Life, in years Time per part (hours) 4 10 0.40 REQUIRED: Determine the number of machine parts/year that could be produced so that 2 lathes will be equally economical if the MARR is 18%. Use AWM
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
Two lathes are being considered in the manufacture of certain machine parts. Data is given below, all cost in peso:
LATHE A
LATHE B
First Cost
40,000
56,000
Salvage Value
5,000
7,000
Annual Maintenance
2,000
2,800
Operation, Cost/hour
4
3.5
Life, in years
10
12
Time per part (hours)
0.40
0.25
REQUIRED:
Determine the number of machine parts/year that could be produced so that 2 lathes will be equally economical if the MARR is 18%. Use AWM
If the number of parts is 10,000 units, which lathe will you recommend? Use ROR
If the number of parts is 10,000 units, which lathe will you recommend? Use PWM
If the number of parts is 10,000 units, which lathe will you recommend? Use EUAC
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