Machines that have the following costs are under consideration for a new manufacturing process. Compute the Equivalent Annual Worth with an interest rate of 8%,compounded semiannually. The machine last 4 years.First cost: $40,000Semiannual Operating cost: $8,970Semiannual incomes: $14,000Salvage value: $10,000a. EAW = $2,285Ob. EAW = $175O c. EAW = $1,958O d. EAW $ 21,745

Step 1: Effective Semiannual Interest RateThe annual nominal interest rate is 8%, and since it's…

Answered: Machines that have the following costs…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Calculate the hourly operating cost (under average conditions) for a 180- horsepower motor grader which costs $230,000 and is used in general contracting for 1500 hours per year for 10 years. The per gallon price of diesel fuel is $2.90. Salvage value is estimated to be $85,000 and a set of tires costs $5,000 for 2000 hours of average useful life. Assume a repair factor of 40% based on 10,000 hours of useful life as a percentage of hourly straight-line depreciation. (Use discount rate of 8%).
expense of $500. Consider a yearly Two machines are evaluated for a new project, consider a yearly interest rate of 6% and the information described in the following table. Determine EUAC for both alternatives and determine the best option. Purchase cost Salvage value Duration Machine A Machine B $10,000 $15,000 $1,250 $1,950 5 years 10 years 11 13 L
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Please show work
A dozer costs $145,000 to purchase and has a useful life of 6 years with a salvage value of $15,000. Assume that MARR is 11%. How much should the company charge per hour to recover the cost of the investment if the dozer will operate 1,200 hours/year.

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