4. The annual worth values for a defender, which can be replaced with a similar usedasset, and a challenger are estimated. The defender should be replaced?AW Value, S per YearChallenger-21,000-18,000-13,100Number ofYears RetainedDefender-14,000-13,700-16,90034-17,000-18,000-15,600-17,500123 +5

Business organizations utilize actual resources as machines and gear to deliver labor and products.…

- The annual worth values for a defender, which can be replaced with a similar u asset, and a challenger are estimated. The defender should be replaced? AW Value, $ per Year Challenger -21,000 -18,000 -13,100 -15,600 -17,500 Number of Years Retained Defender 1 -14,000 -13,700 -16,900 -17,000 -18,000 2345

- The annual worth values for a defender, which can be replaced with a similar u asset, and a challenger are estimated. The defender should be replaced? AW Value, $ per Year Challenger -21,000 -18,000 -13,100 -15,600 -17,500 Number of Years Retained Defender 1 -14,000 -13,700 -16,900 -17,000 -18,000 2345

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 5 Cost data of a machine is shown in the following table with an annual rate of 12%. Calculate annual worth at end of year 2. M&O cost Retention Yr. Market Value per year O (First Cost) 55,000 35,000 45.000 20,000 47,500 3 15,000 50,000 2,000 53,500 O 63,256 O 69.289 O 68,476 O 67,854 Question 6 Use same cost data from last question and 12% annual rate of return. Calculate annual worth at end of Year 3. O 65,765 O 64,332 O 67,428 O 66.256 Question 7 Use the same cost data of the machine from the above 2 questions and 12% interest rate per year. What is the ESL of this machine? O 1 O 2 O 3 O 4
Question 5 Cost data of a machine is shown in the following table with an annual rate of 12%. Calculate annual worth at end of year 2 M&O cost Retention Yr. Market Value per year O First Cost) 55,000 1 35,000 45.000 2 20,000 47.500 3 15,000 50.000 4 2.000 53.500 O 6a256 O 69209 O R476 O 67.854 Question 6 Use same cost data from last question and 12% annual rate of return. Calculate annual worth at end of Year 3. O 66.765 O 64332 O 67.428 O 66256 D Question 7 Use the same cost data of the machine from the above 2 questions and 12% interest rate per year. What is the ESL of this machine? 01 04
In order to make a replacement decision, a firm calculated the equivalent annual cost of owning an asset as follows: EUAC Annual EUAC Replacement Capital Repair Repair Period Costs Costs Costs 1 2 3 4 5 $1,287- $1,082 $400 $189 $976 $600 $298 in 1 year $812 $800 $437 $673 $1,200 $592 When should the company replace the equipment? in 2 years O in 4 years in 5 years in 3 years
. A manager has been presented with two proposals for automating a production process. Proposal A involves an initial cost of $15,000 and an annual operating costof $2,000 per year for the next 4 years. Thereafter, the operating cost is expected to increase by $100 per year. This equipment is expected to have a 10-year life with no salvage value.Proposal B requires an initial investment of $28,000 and an annual operating cost of $1,200 per year for the first 3 years. Thereafter, theoperating cost is expected to increase by $120 per year. This equipment is expected to last for 20 years and will have a $2,000 salvage value. If the company's minimum attractive rate of return is 10%, which proposal should be accepted on the basis of present worth analysis?
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
Breakeven Example 8.2 • MARR is 12% per year. Select the more economical vendor bid. -8,000 - 13.000 Initial cost. S -3,500 -1.600 Annual costs, S per year Salvage value. $ Life. vears 2,000 10
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
From the following alternatives based on 8% interest rate. Machine A B First Cost P5000 P10000 Annual maintenance P500 P200 Salvage Value P600 P1000 Useful life 5 years 15 years What is the EUAC of machine A? Select the correct response: P1650.01 P1331.47 P1442.70 P2553.24