Problem: A diagnostics laboratory is considering one of the following microscopes with digital recording and pattern detection software: Option A Option B Options C Cost Savings Interest $20,000 $1,199 6% $30,000 1. Calculate Present Worth for all Options showing your calculations 2. Calculate IRR for all options showing your calculations 3. Which Option do you recommend and why? $2,199 9% $15,000 $2,000 7% Each machine will have a 20-year life with no salvage value. There is a lot of debate within the company as to whether these devices are really going to last long, but they assume MARR of 10% as reasonable.

Problem: A diagnostics laboratory is considering one of the following microscopes with digital recording and pattern detection software: Option A Option B Options C Cost Savings Interest $20,000 $1,199 6% $30,000 1. Calculate Present Worth for all Options showing your calculations 2. Calculate IRR for all options showing your calculations 3. Which Option do you recommend and why? $2,199 9% $15,000 $2,000 7% Each machine will have a 20-year life with no salvage value. There is a lot of debate within the company as to whether these devices are really going to last long, but they assume MARR of 10% as reasonable.

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: Find the Present Worth of each of the option Investment: $10 million Annual Revenue: $103…

A: Net Cash flow = Annual Revenue - Annual Cost MARR = 5% Annual Revenue Grow at 1 % per years &…

Q: A remotely located air sampling station can be powered by solar cells or by running an electric line…

A: Solar cells Initial Cost = 19,000 Annual Cost = 1,100 Solar cells Initial Cost = 9,000 Annual…

Q: 1. A piece of construction equipment was bought 3 years ago for $ 500,000, expected li: of 8 years…

A: PW stands for present worth. EAC stands for equivalent annual cost, it can be calculated by dividing…

Q: Two pieces of equipment are being considered. Machine A costs $1,000 and has a useful life of 8…

A: NPV stands for Net Present Value, which is a financial measure used to evaluate the profitability of…

Q: 7. Two machines are considered for purchase. Assume 10% interest, Use Benefit Cost analysis. Machine…

A: “Since you have posted a question with multiple sub parts, we will provide the solution only to the…

Q: A pipeline contractor can purchase a needed truck for $42,000. Its estimated life is 6 years, and it…

A: here we calculate the following questions by using the given data , so the calculation of the…

Q: A firm is choosing between machines that perform the same task in the same time. Assume the minimum…

A: For machine X, the first cost (P) = 5,000 and the estimated service life is 6 years. Salvage value…

Q: Assume that you are considering to buy a Toyota Corolla automoble. You need to select one of the…

A: Given: Diesel Gasoline…

Q: You have the choice of two machines, A and B. Machine A costs $40,000 with a salvage value of…

A: Salvage value is the book value of an asset after all depreciation has been completely discounted.

Q: A remotely located air sampling station can be powered by solar cells or by running an electric line…

A: Future-Worth Analysis will evaluate the alternatives based on some future point in time. The…

Q: Because of Environmental Protection Agency pollution credits to biodiesel producers, biodiesel…

A: Answer is given below

Q: Using Present worth Analysis, please calculate the best alternative (interest rate of 6%) 9,000…

A: *Hi there as you have posted multiple questions following our guidelines we can only solve 1 at once…

Q: Required Information The Bureau of Indian Affairs provides various services to American Indians and…

A: The present worth of a project or investment refers to its value at present based on the associated…

Q: am. 161.

A: The objective of this question is to determine the breakeven point in terms of units of production…

Q: The annual profit from an investment is $20,000 each year for 5 years and the cost of investment is…

A: To verify the net present value (NPV) calculation, we need to consider the following factors:1.…

Q: Problem 1 - Revenue and Cost Calculations A manufacturing plant operation has fixed costs of…

A: The total cost of producing and providing a good or service to customers is referred to as cost of…

Q: Question #5: a. You have 2 investment choices. The Warlight machine costs $10,000 and has a salvage…

A: Given information 2 Machines: Warlight Machine and Bridgedale machine Cash flow table MARR=18%

Q: 12. In calculating the annual worth of an alternative over one life cycle, the value obtained is: a.…

A: Introduction Annual Worth All cash flows are converted to an equivalent uniform annual amount over…

Q: Which process line should be built for a new chemical? The expected market for the chemical is 20…

A: The concept of present worth is widely used in various financial and investment analyses, including…

Q: There is a 50% chance that consumer spending will increase next year. Our clothing business heavily…

A: Detailed explanation:To determine the strategy based on the Maximax decision criterion, we need to…

Q: The city of St. John's is intalling a new swimming pool in the east end recreation centre. One…

A: Present worth, also known as present value, is a financial concept used in the field of time value…

Q: Capital investment $100,000 Annual revenues $30,000 Annual expenses $9,000 Market value $10,000…

A: Given information Initial capital=$100000 Annual revenue=$30000 Annual expenses=$9000 Market…

Question

Problem:
A diagnostics laboratory is considering one of the following microscopes with digital recording and pattern detection software:
Option A
Option B
Options C
Cost
Savings
Interest
$20,000
$1,199
6%
$30,000
1. Calculate Present Worth for all Options showing your calculations
2. Calculate IRR for all options showing your calculations
3. Which Option do you recommend and why?
$2,199
9%
$15,000
$2,000
7%
Each machine will have a 20-year life with no salvage value. There is a lot of debate within the company as to whether these devices are really going to
last long, but they assume MARR of 10% as reasonable.

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: Introduction

VIEW

Step 2: 1. Calculation of Present Worth

VIEW

Solution

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

Please no written by hand and no image
Answer the problems on the basis of the above graph and the most likely estimates given as follows: If the profit (R−E) is decreased by 5%, this projectis not profitable. (a) True (b) False.
4
Rerform an EAC analysis and evaluate what decision to make regarding 2 challengers and 1 defender. Elaborate:a) Graphsb) EAC analysisc) Conclude the exercise and make a decision regarding the results Machine N1 (#1 challenger) useful life = 8 years Initial Cost $15,000 MARR 18% Year Operating costs Market value EAC 1 $ 355.00 $ 8,000.00 2 $ 500.00 $ 7,000.00 3 $ 788.00 $ 6,000.00 4 $ 1,000.00 $ 5,000.00 5 $ 1,355.00 $ 4,000.00 6 $ 1,688.00 $ 3,000.00 7 $ 2,012.00 $ 1,000.00 8 $ 2,345.00 $ 0.00
You have been asked to perform a sensitivity analysis on a plant modernization plan. The initial investment is $30,000. Expected annual savings is $13,000. Salvage value is $7,000 after a 7 year planning horizon. The MARR is 12%. Determine the AW if the annual savings change by the following percentages from the initial estimate: b. -80%c. -60%d. -40%e. -20%f. +20%g. +40%h. Determine the percentage change in net annual savings that causes a reversal in the decision regarding the attractiveness of the project
None