The CFO of a consulting engineering firm is deciding between purchasing Ford Explorers and Toyota 4Runners forcompany principals. The purchase price for the Ford Explorer will be $29,250. Annual maintenance costs for theExplorer are expected to be $425.0 per year more than that of the 4 Runner. The purchase price for Toyota 4 Runners is36,750 The trade-in values after 3 years are estimated to be 50% of the first cost for the Explorer and 60% for the 4Runner. (a) What is the incremental ROR between the two vehicles? (b) Provided the firm's MARR is 15.00% per year,which vehicle should it buy? (Round the final answer to three decimal places.)a) The incremental ROR between the two vehicles is%b) The firm should buy as the incremental ROR is (Click to select) the MARR.

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Answered: The CFO of a consulting engineering…

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 new airconditioning unit costs P150,000 and will have a salvage value of P15,000 after 5years. Electrical cost per kWh is P1.25. Calculate the annual savings in terms of electrical savings if MARR is 15% per year.
Milwaukee Machine Tool is planning to buy a machine for S15,000 with a salvage value of 20% of the initial cost after a life of 10 years. The company estimates it will need $900 for supplies, $250 for maintenance, $100 for utilities and S1,500 for overhead. They estimate these will increase by S1200, 8%, 10% and $200 respectively over the 10-year machine life. If interest rate is 5% per year, what is the net present value of the project? -$78,301.03 2 -$82,216.08 3 -$93,301.03 -$52,216.08
Ans is $ 7.322 please correct me
what is the EUAC corresponding to an overhaul cost of 4000 at year 3 for a machine with 7 years of useful life? use i=8%
Virgin Galactic is considering two materials for certain parts in a re-useable space vehicle: carbon fiber reinforced plastic (CFRP) and fiber reinforced ceramic (FRC). The costs are shown below. Which should be selected on the basis of a present worth comparison at an interest rate of 10% per year? Solve using (a) tabulated factors, and (b) single-cell spreadsheet functions.
You work for Midstates Solar Power where a Semi2 machine has an initial cost of $80,000 and an operating cost of $21,000 per year until year 5, after which it would have a salvage value of $13,000. The Auto1 machine has an initial cost of $62,000 and an operating cost of $21,000 in year 1, increasing at 8% per year until year 5, after which time it would have a salvage value of $2,000. Use an interest rate of 10% per year to determine: (a) Which of the two machines will have the least total annual cost.
A construction manager just starting in private practice needs a van to carry crew and equipment. She can lease a used van for $3910 per year, paid at the beginning of each year, in which case maintenance is provied. Alternatively, she can buy a used van for $5407 and pay for maintenance herself. She expects to keep the van for three years at which time she could sell it for $1045. What is the most she should pay for uniform annual maintenance to make it worthwhile to buy the van instead of leasing it, if her MARR is 20%? Enter your answer as follow: 123456
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The CFO of a consulting engineering firm is deciding between purchasing Ford Explorers and Toyota 4Runners for company principals. The purchase price for the Ford Explorer will be $30,750. Annual maintenance costs for the Explorer are expected to be $575 per year more than that of the 4Runner. The purchase price for Toyota 4Runners is 35,250 The trade-in values after 3 years are estimated to be 50% of the first cost for the Explorer and 60% for the 4Runner. (a) What is the incremental ROR between the two vehicles? (b) Provided the firm’s MARR is 15% per year, which vehicle should it buy?
Required information An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has an estimated first cost of $38,000, an annual operating cost (AOC) of $10,000, and a service life of 2 years. Method B will cost $79,000 to buy and will have an AOC of $3,000 over its 4-year service life. Method C costs $143,000 initially with an AOC of $3,000 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth 6% of its first cost. Perform a future worth analysis to select the method at i= 13% per year. The future worth of method A is $55118 The future worth of method B is $ The future worth of method C is $ Method B is selected.
Note: the answer should be typed.
First Corp Bank advertises interest paid at 2% every 6 months. What is the APR?

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