Polytec Chemical, Inc. must decide between two additives to improve the dry-weather stability of its low- cost acrylic paint. Additive A will have an equipment and installation cost of $136,000 and an annual cost of $55,000. Additive B will have an installation cost of $175,000 and an annual cost of $31,000. If the company uses a five-year recovery period for paint products and an MARR of 30% per year, which process is favored on the basis of an incremental rate of return analysis? Also, determine the value of Ai*.

Polytec Chemical, Inc. must decide between two additives to improve the dry-weather stability of its low- cost acrylic paint. Additive A will have an equipment and installation cost of $136,000 and an annual cost of $55,000. Additive B will have an installation cost of $175,000 and an annual cost of $31,000. If the company uses a five-year recovery period for paint products and an MARR of 30% per year, which process is favored on the basis of an incremental rate of return analysis? Also, determine the value of Ai*.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: What is actual-dollar analysis?

A: The actual–dollar analysis is one of the approaches which is used to find equivalence calculation…

Q: 155 5 500 450 950 190 90 12 7 6 500 900 1,400 116.67 7 500 1,350 7.75 500 1,800 2,300 74.19 8 500…

A: The total cost refers to the sum total of costs incurred during the production process. The total…

Q: 87366 Econ121 Sara Co = Homework: Chapter 1 Homework Question 3, Concept Question A.1 Part 1 of 2 HW…

A: Given sales chart

Q: Your insured has Comprehensive coverage on O.A.P. 1 Owner's Policy and informs you that he/she will…

A: Comprehensive Coverage: This is an element of an auto insurance policy that provides coverage for a…

Q: The per capita energy consumption level (in kilowatt-hours) in a certain country for a recent year…

A: Normal distribution is the distribution of a data set with no skewness involved. All measures of…

Q: Jack received a $4,000 raise this year; this increased his salary as an associate television…

A: Initial Salary = $35,500 New Salary = $39,500 Increase in salary = $4,000 Percentage increase =…

Q: The United States is still manufacturing intensive. Only 40% of U.S. jobs come from the service…

A: The statement is false

Q: QUESTION 7 The output gap is increasing over time because actual GDP is greater than potential GDP…

A: The output gap is an economic proportion of the distinction between the actual result of an economy…

Q: (Table) Based on the table, the value for B is: Q 0 5 11 18 A 38 50 61 71 80 85 L 0 1 2 3 4 5 6 7 8…

A: MPP stands for Marginal Physical Product (MPP). It is the incremental output due to the additional…

Q: Supply Demand QUANTITY OF DOLLARS Refer to the figure above. When American travelers spend money…

A: Exchange rate refers to the value of one currency in terms of another currency. An increase in the…

Q: A typical worker will earn £300k in their youth and £600k in middle-age. Over their lifetime, they…

A: Borrowing refers to the act of obtaining a loan, which is a sum of money that is lent by a lender to…

Q: b) Draw a large graph with “consumption when young” on the vertical axis and “consumption in…

Q: b. How many screens will be built if the real interest rate is 5.5 percent? screen(s) c. How many…

A: The marginal product of an input, say labour, is defined as the extra output that results from…

Q: Prompt #1: Of the many beneficial suggestions tha were provided, in the section "Learner Tips",…

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: 17. An engineer owns a design firm that generates $1 million per year in gross fees. The engineer…

A: The fair market price (FMV) of an asset is the price that a willing buyer would pay to a willing…

Q: What was the markdown percent for last year if the net sales totaled $79,005 while markdowns were as…

A: Both net sales and the markdown percent are significant economic indicators that are often used by…

Q: Domestic: Foreign: Qi D= 42 - 2*P Qa F = 72 – 3*P Qs.D= -2 + 2*P Qs.F = -4 +P

A: Since you have posted multiple subparts, as per the guidelines we can solve only the first 3…

Q: The time series line chart below shows the total return on a stock index fund over a certain time…

A: The graph above shows the changes in stock index during the time period from before 2017 to 2021.…

Q: To make CDs look more attractive as an investment than they really are, some banks advertise that…

A: Introduction: Simple interest: Simple interest is defined as a fixed percentage of the principle…

Q: You work for a pharmaceutical company that has developed a new vaccine. The patenton the vaccine…

A: To calculate the present value of the new drug's profits, we can use the concept of discounted cash…

Q: gle Chrome…

A: The number of movie tickets purchased with the initial amount of $2,000 is 100 because the price of…

Q: TOTAL PROFITS at the profit maximizing level of production is: 315 O 180 450 O 135

A: Answer: d (135) Explanation: Profit=Price-ATC×Quantity At equilibrium (P=MC), the price is $10 and…

Q: Q9. The profit levels of a company for varying levels of sales is shown in the table below: (All…

A: So we have to calculate the profit rate for each sales given and compare the given table which one…

Q: 000 D. L003.000 4.000s.000.00 7.000 .000 .000 000 1000 2.000 3.000 4.000 s.000 6.000 7.000 s.000…

A: Market supply curve is the sum of the individual supply curve, the sum is the sum of quantities at…

Q: Question 4 The equivalent rate of interest for a discount rate of 10.5% for 60 days is 104.9825%.…

A: The relationship between discount rate and interest rate is as follows: r=d1-dt where, d is the…

Concept explainers

Comparative Advantage and Absolute Advantage Analysis

The theory of absolute advantage was given by Adam Smith in the year 1776.

Question

Polytec Chemical, Inc. must decide between two additives to improve the dry-weather stability of its low-
cost acrylic paint. Additive A will have an equipment and installation cost of $136,000 and an annual cost
of $55,000. Additive B will have an installation cost of $175,000 and an annual cost of $31,000. If the
company uses a five-year recovery period for paint products and an MARR of 30% per year, which process
is favored on the basis of an incremental rate of return analysis? Also, determine the value of A/*.
The value of A/* is
On the basis of an incremental rate of return analysis, process B
✓is favored.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

A32. With reference to the economy, Uniform Recall Period, Mixed Recall Period and Modified Mixed Recall Period are methods used to measure (a) Poverty Line (b) Extent of Human development (c) Impact of industries on climate change (d) Working age population ratio
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
38. Federal fiscal year runs from Group of answer choices July 1, 2014 – June 30, 2015 Oct 1, 2014- Sept 30, 2015 Apr 1, 2014 – Mar 31, 2015 Jan 1, 2014 - Dec 31, 2014
If the price of ice cream increases from $8 to $10 a gallon, quantity demanded of frozen yogurt increases from 120 to 138 gallons, ceteris paribus. As a result, the percentage change in the price of ice cream is 0.2222 % 22.22 % -0.2222 % O-22.22%
(Table) Based on the table, the value for B is: Q 0 5 11 18 A 38 50 61 71 80 85 L 0 1 2 3 4 5 6 7 8 9 10 O 10. O 11. 9. O 13. MPP 0 5 6 7 9 B 12 11 10 9 5 P $8 $8 $8 $8 $8 $8 $8 $8 $8 $8 $8 VMP 0 40 48 56 72 88 C 88 80 72 40 W $80 $80 $80 $80 $80 $80 $80 $80 $80 $80 $80
ECONOMICS
PLS HELP ASAP ON BOTH