Question 4☐You're considering buying a new delivery vehicle for your flower shop, and you have two choices, one with a useful life of 10 yearsand the other with a useful life of 15 years. The first, Van X, has a useful life of 15 years and will cost you $42,000 in Year 0. Youexpect it to earn an additional $8,000 per year in profit, and have a salvage value of $2,000 at the end of Year 15.Using the coterminated assumptions and a study period of 15 years, what is the Future Worth of Van X?Typed numeric answer will be automatically saved.I

Choosing the Right Delivery Van: A Deep Dive into Future Worth with Van XCongratulations on…

Answered: Question 4 ☐ You're considering buying…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Suppose that you have just completed the mechanical design of a high-speed automated palletizer that has an investment cost of $3,800,000. The existing palletizer is quite old and has no salvage value. The market value for the new palletizer is estimated to be $430,000 after nine years. One million pallets will be handled by the palletizer each year during the nine-year expected project life. What net savings per pallet (i.e., total savings less expenses) will have to be generated by the palletizer to justify this purchase in view of a MARR of 18% per year? Use the AW method. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 18% per year. The net savings required to be generated by the new palletizer to justify its purchase are $ per pallet (Round to the nearest cent)
An integrated, combined cycle power plant produces 285 MW of electricity by gasifying coal. The capital investment for the plant is $450 million, spread evenly over two years. The operating life of the plant is expected to be 18 years. Additionally, the plant will operate at full capacity 76% of the time (downtime is 24% of any given year). The MARR is 10% per year. a. If this plant will make a profit of two cents per kilowatt-hour of electricity sold to the power grid, what is the simple payback period of the plant? Is it a low-risk venture? b. What is the IRR for the plant? Is it profitable? a. The simple payback period of the plant is years. (Round up to one decimal place.) It's a venture. b. The IRR for the plant is%. (Round to one decimal place.) The plant is
An integrated, combined cycle power plant produces 280 MW of electricity by gasifying coal. The capital investment for the plant is $690 million, spread evenly over two years. The operating life of the plant is expected to be 17 years. Additionally, the plant will operate at full capacity 78% of the time (downtime is 22% of any given year). The MARR is 5% per year. a. If this plant will make a profit of three cents per kilowatt-hour of electricity sold to the power grid, what is the simple payback period of the plant? Is it a low-risk venture? b. What is the IRR for the plant? Is it profitable? O
The fixed cost related to the production of a product is $500,000 per year. Assume that the variable cost is $20,000 and the sell- ing price is $30,000 for each percentage point of annual output capacity (which equals sales demand). Thus, the maximum sales per year are $3,000,000 (at 100% of output capacity), and we have: (2.3) C; = $500,000 per year C, $20,000/1% of annual output capacity (Fixed cost) (Variable cost/unit) p = $30,000/1%' of annual output capacity (Selling price/unit) a. Determine the breakeven point for this situ- ation.
You are considering two investment options. In option A, you have to invest RM5000 now and RM1000 three years from now, In option B, you have to invest RM2500 now, RM1500 a year from now, and RM1000 three years from now. In both options, you will receive four annual payments of RM2000 each. (You will get the first payment a year from now.) Which of these options would you choose based on (a) the conventional payback criterion, and (b) the present worth criterion, assuming 8% interest? Based on conventional payback period method, choose either (A/B/Both) Format: PW Option A Format : PW Option B Format : Format : Based on PW analysis method, choose Option (A or B)
If the profit function for selling smart phone screen magnifier is -4500p2 + 561500p – 11898000, what is the maximum profit that can be expected from selling smart phone screen magnifiers? Question 1 options: $ 0, no profit $ 5,617,681 $ 1,717,764 -$ 8,004,171
Your firm is thinking about investing $300,000 in the overhaul of a manufacturing cell in a lean environment. Revenues are expected to be $39,000 in year one and then increasing by $13,000 more each year thereafter, Relevant expenses will be $20,000 in year one and will increase by $10,000 per year until the end of the cell's nine-year life. Salvage recovery at the end of year nine is estimated to be $10,000. What is the annual equivalent worth of the manufacturing cell if the MARR is 10% per year? How sensitive is the annual worth to ± 10% changes in the MARR? Are changes in the MARR really a significant consideration in this problem? Click the icon to view the interest and annuity table for discrete compounding when the MARR is 9% per year. E Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 11% per year. Find Annual Equivalent…
A company is considering an investment (at time = 0) in a machine that produces large plastic boxes. The cost of the machine is 43,118 dollars with zero expected salvage value. Annual production in units during the 3-year life of the machine is expected to be (starting at time = 1) 4,213, 8,486, and 12,468. The sale price per unit of the plastic boxes is 12 dollars in year one, and then expected to increase by 9% per year. Production costs per unit will be 5 dollars in year one, and then expected to increase by 3% per year. Depreciation on the machine is 10,192 dollars per year, the tax rate is 40% and the minimum acceptable rate of return is 6% percent. Calculate the net present value of this investment. Assume all flows are at the end of each year. (note: round your answer to the nearest cent, and do not include spaces, currency signs, plus or minus signs, or commas)
Susan Jones has a job as a pharmacist earning $45,000 per year, and she is deciding whether to take another job as the manager of another pharmacy for $55,000 per year or to purchase a pharmacy that generates revenue of $350,000 per year. To purchase the pharmacy, Susan would have to use her $20,000 savings and borrow another $90,000 at an interest rate of 8% per year. The pharmacy that Susan is contemplating purchasing has additional expenses of $100,000 for prescription and non-prescription drugs and lines of women’s and men’s personal hygiene products and cosmetics; $45,000 for one full time person; $20,000 for one part time person; $12,000 for rent; $2,500 for electricity; $1,300 for natural gas; $1,200 for telecommunications; and depreciation and amortization expenses are $5,500. Assume that income and business taxes are 35% and the repayment of the principal of the loan does not start before three years. Also assume that revenue is expected to grow at 5% per year and expenses at…

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