Question 5The second, Van Y, has a useful life of 10 years and will cost you $33,000 in Year 0. You expect it to earn the same additional $8,000per year in profit, and have a salvage value of $5,000 at the end of Year 10.Using the coterminated assumptions and a study period of 15 years, what is the Future Worth of Van Y? Assume that you reinvestall cash flows at the MARR after the end of the useful life of the van.Typed numeric answer will be automatically saved.

Part 2: Explanation:Step 1: Calculate the total revenue generated by Van Y over its useful life. -…

Answered: Question 5 The second, Van Y, has a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

For your 21st birthday, your grandfather offers you a gift of $1,000 today. However, you have the choice of waiting 3 years and receiving $1,500 or waiting 5 years and receiving $3,000. If your money grows at a rate of 8% compounded annually, which alternative should you choose? Choice 1: P = $ Choice 2: P = $ Choice 3: P = $ Round entry to the nearest dollar. Tolerance is ±4.
An equipment costing $57,500 is being considered for a production process at Dewey Chemicals. The expected benefits per year is $4,500 and estimated salvage value is $10,000. Determine the rate of return the company can get in this equipment proposal. Equipment life = 15 years.
Avian Air Cargo is considering an investment of $10,000,000 with life expectancy of 10 years and annual operating cost of $400,000 in Year 1 with an $50,000 per year starting in Year 2 through the life of the project. Avian Air Cargo anticipates a revenue stream of $2,500,000 per year for 20 years I 12%, what is the rate of return for this project and is it economically justified? It is NOT economically justified because the rate of return is between 14% and 15%. It IS economically justified because the rate of return is between 10% and 11%. It is NOT economically justified because the rate of return is between 10% and 11%. It IS economically justified because the rate of return is between 14% and 15% of MARR
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…
Problem 03.013- Annual worth calculations What is the equivalent annual cost in years 1 through 9.00 of a contract that has a first cost of $77,000 in year 0 and annual costs of $17,000 in years 3 through 9.00? Use an interest rate of 15.00% per year. (Round the final answer to three decimal places.) The equivalent annual cost is determined to be $ I
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)
Problem 03.015- Annual worth calculations Improvised explosive devices (IEDs) are responsible for many deaths in times of strife and war. Unmanned ground vehicles (robots) can be used to disarm the IEDs and perform other tasks as well. If the robots cost $125,000 each and the military arms unit signs a contract to purchase 4,000 of them now and another 7,500 one year from now, what is the equivalent annual cost of the contract over a 8.00-year period at 12.00% per year interest? (Round the final answer to three decimal places.) The equivalent cost of the contract is determined to be $

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS