Q1 - With these new estimates, What is the AW of the Investment and Salvage value for YORK AC unit?Q2 - With these new estimates, What is the FW of the Investment and Salvage value for YORK AC unit? Mohamad, owner of an residential furnished apartment's in Dubai, performed an economic analysis 4 years ago when he decided to place an new eefficient central AC unit for eachapartments instead of old split units windows type in each room. The estimates used and the annual worth analysis at MARR = 12% are summarized below. Two differentAC brands were compared.LGYorkCost and installation, $Annual maintenance cost, $ per year -800Salvage value, $Electrical power savings, $ per year 25,000 35,000Useful life, years-26,000 -36,000-3002,0003,000710The spreadsheet in below sheet is the one Mohamad used to make the decision. York was the clear choice due to its substantially larger AW value, hence York AC units wereinstalled.MARR12%LGYorkAnnualRepairsavingsRepairmaintenance savingsInvestmentInvestmentAnnualand salvageand salvage0$26,000Yearsmaintenance$0$800$0$36,000$0$0$25,000$25,000$300$3001 $0$0$35,0002 $0-$800$0$35,0003 $0$800$35,000$25,000$25,000$0$3004 $0$800$0$300$35,000$35,0005 $06 $0$25,000$25,000$25,000$800$0$300-$800$0-$300$35,0007$2,000$800$0$35,000$35,000$35,0008$0-$3009$0|$30010$3,000$300$35,000AW element$6,068$800$25,000|$7,025$300$35,000Total AW$18,701.17$28,499.52During a quick review (year 4 of operation), it was obvious that the maintenance costs and repair savings have not followed (and will not follow) the estimates made 4 years ago. Infact, the maintenance contract cost is going from $300 this year (year 4) to $1200 per vear next year and will then increase 7% per year for the next 6 years. Also, the electricalpower savings for the last 4 years were $31,312 (year 1), $27,565 ( year 2), $30,493( year3), and $32,903( year4), as best as Mohamad can determine. He believes savings willdecrease by $3,349 per year hereafter. Finally, these 4-year-old AC units are worth nothing on the market now, so the salvage is zero, not $3000.

Given information Product : York AC Initial cost=$36000 First 3 years annual maintenance cost= $300…

Answered: Q1 - With these new estimates, What is…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A manufacturer has been ordered to stop discharging acidic waste into the city sewer. Your analysis shows that the company should choose one of the following systems: System Installed Cost H J $25,000 Your Answer: $35,000 Annual O&M Cost $1,000 in the first year, but grows by 10% each year $500 in the first year, but grows each year by $100 Salvage Value $2,000 $5,000 If the life span of each project is 20 years and interest is assumed to be Y%, which system should be purchased? 4
1.b You are faced with a decision on an investment proposal. Specifically, the estimated additional income from the investment is $125,000 per year; the investment cost is $400,000; and the first year estimated expense of $20,000 and will increase a rate of 5% per year. Assume an 8-year analysis period, no salvage value, and MARR = 15% per year. What is the ERR ( Ԑ=MARR) of this proposal? show whole solution, not in excel please
5
1.a You are faced with a decision on an investment proposal. Specifically, the estimated additional income from the investment is $125,000 per year; the investment cost is $400,000; and the first year estimated expense of $20,000 and will increase a rate of 5% per year. Assume an 8-year analysis period, no salvage value, and MARR = 15% per year. Calculate the PW and FW of this proposal? Show the whole solution, not in excel please
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! Required information An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has an estimated first cost of $40,000, an annual operating cost (AOC) of $12,000, and a service life of 2 years. Method B will cost $70,000 to buy and will have an AOC of $6,000 over its 4-year service life. Method C costs $125,000 initially with an AOC of $3,500 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth 7% of its first cost. Perform a present worth analysis to select the method at /= 12% per year. The present worth of method A is $ The present worth of method B is $ The present worth of method C is $ ✓is selected. Method C
B) Calculate the AEC (Average Equivalent Cost) of the hospital building using the cost requirements given in Table 3 ) Table 3 Construction Cost OMR 1 million OMR 150,000 Annual Running Cost OMR 30,000 Repainting Costs @ every 2 Years Repair Costs @every 2 years OMR 25,000 Major replacement cost @ 5 years OMR 75,000 (Including the service costs) The demolition cost is estimated at OMR 200,000 (excluding the Salvaged material valued at OMR 60,000) at the end of 15th year. The interest rate (r) is 5% and the Annual Sinking Fund (ASF) is 1.5%. Note: The PV and SF tables is provided as attachment to this question paper.
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Required information For equipment that has a first cost of $17,000, the estimated operating costs and year-end salvage values are as shown. Year Operating Cost, $ Salvage Value, $ 1 -1,000 7,000 2 -1,200 5,000 3 -1,300 4,500 4 -2,000 3,000 5 -3,000 2,000 Write the PMT function to determine AW for year 4, if net operating costs are entered into cells B2 through B6. (Please upload your response/solution using the controls below.)
A manufacturing company is evaluating an investment plan to produce a new product based on the following estimated data: • Equipment Cost: $150,000 • Overhead Cost: $30,000/year • Sales price: $12/unit Operation cost: $20/operating hour • Production time: O.1 hour/unit • Planning horizon: 4 years • MARR: 15% Salvage value after 4 years: 0 By using break-even analysis, the break-even sales value for the product should be: Select one: a. 6755 units X b. 8255 units C. 9755 units d. 11,255 units The correct answer is: 8255 units
Ali is a Planning engineer considered the following three mutually exclusive investment projects (A, B, and C) at PTUK. He summarized the relevant data provided for these projects as; for project A, the initial investment is -200 , annual return is 22 and the salvage value is 200. For project B, the initial investment is -4000, salvage value is 2600 and the annual return is 620. For project C, the initial investment is -5450, annual retum is 740 and salvage value is 4300. The useful life for these projects is similar which is 5 years, and MARR=10% . Which alternatives are feasible based on their ROR.
The AW values for retaining a presently owned machine for additional years are shown in the table. Note that the values represent the AW amount for each of the n years that the asset is kept, that is, if it is kept 5 more years, the annual worth is $95,000 for each of the 5 years. Assume that future costs remain as estimated for the replacement study and that used machines like the one presently owned will always be available. (a) What is the ESL and associated AW of the defender at a MARR of 12% per year? (b) A challenger with an ESL of 7 years and an AWC = $ −89,500 per year has been identified. Which AW will be less for the respective ESL periods? Retention Period, Years AW Value, $ per Year 1 −92,000 2 −88,000 3 −85,000 4 −89,000 5 −95,000

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Q1 - With these new estimates, What is the AW of the Investment and Salvage value for YORK AC unit? Q2 - With these new estimates, What is the FW of the Investment and Salvage value for YORK AC unit?