Three industrial mowers are being evaluated by a company that provides lawn careservice. At the end of its useful life, each mower will have a negligible salvage value. Determinethe economic choice, based on the following cost and performance parameters:ABсFirst cost$1,500 $2,000 $5,000Operating cost/hour $35 $50 $76Revenue/hour$55$75 $100Hours/year1,000 1,100 1,200Useful life2 years 3 years 5 years

The objective of the question is to determine the most economical choice among the three mowers…

Answered: Three industrial mowers are being…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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There are two alternative machines for a manufacturing process. Both machines have the same output rate, but they differ in costs. Machine A costs $20,000 to set up and $8,000 per year to operate. It must be completely replaced every 3 years, and it has no salvage value. Machine B costs $50,000 to set up and $2,160 per year to operate. It should last for 5 years and has no salvage value. The costs of two machines are shown below. 0 1 2 3 4 5 Machine A 20,000 8,000 8,000 8,000 Machine B 50,000 2,160 2,160 2,160 2,160 2,160 Assuming the cost of capital is 10%,1. find the equivalent annual cost of Machine A in Box 1. Round it to a whole dollar, and no comma or the dollar sign.2. find the EAC of Machine B in Box 2. The same format as box 1.3. Based on the equivalent annual cost method, type in Box 3 which machine do you recommend, Machine A or Machine B. Question 20 options: Blank # 1 Blank # 2 Blank #…
An industrial plant has hired a contractor to develop a solar farm nearby for the industrial plant's electricity consumption. During the 3-year construction period, the contractor will need to run a generator to power the construction. Cost analysis from previous projects indicates: Generator Brand Installed Cost Cost per Hour A $22M $500 B $23M $400 C $25M $250 D $30M $150 At the end of 3 years, the generator will have a salvage value equal to the cost of removing them. The generator will operate 6,000 hours per year. The lowest interest rate at which the contractor is willing to invest money is 7%. (The minimum required interest rate for invested money is called the minimum attractive rate of return, or MARR.) Select the alternative with the least present worth of cost. O Choice "C" with $29,872,900 O Choice "B" with $29,298,320 O Choice C with $28,936,450 O Choice "A" with $29,872,900
Raytheon wishes to use an automated environmental chamber in the manufacture of electronic components. The chamber is to be used for rigorous reliability testing and burn-in. It is installed for $800,000, $350,000 of which is borrowed at 11% for 5 years, and will have a salvage value of $150,000 after 8 years. Its use will create an opportunity to increase sales by $650,000 per year and will have operating expenses of $250,000 per year. Corporate income taxes are 40%. Develop tables using a spreadsheet to determine the ATCF for each year and the after-tax PW, AW, IRR, and ERR, if the chamber is kept for 8 years. After-tax MARR is 10%. Use 7 years class depreciation for MARCS
Required information PEMEX, Mexico's petroleum corporation, has an estimated budget for oil and gas exploration that includes equipment for three offshore platforms as shown. Use PW analysis to select the best alternative at a MARR of 16% per year. Platform First cost, $ million Y Z -300 -450 -510 M&O, $ million per year -320 -290 -230 Salvage value, $ million 75 50 90 Estimated life, years 20 20 20 Select platform X, Y, or Z using tabulated factors. The present worth of platform X is $- 2298.4 worth of platform Z is $- 1944.14 million, the present worth of platform Y is $- 2262.15 million, and the present million. The platform selected based on the present worth is platform Z
The annual fixed costs for a given factory are $150,000, the variable cost is $30 per unit and the selling price is $50 per unit. If the production capacity for this factory is 10,000 units per year, how many units should be made to have an annual profit of $25,000? * 7,500 10,000 8,750 7,850 5,700 None
PW values of a project were calculated for several values of (i). The results were plotted as shown in the figure. a. What are the values of ROR (i*) for this project? Put 100 integer number followed immediately by% 75 1- 50 25 2- 10 20 30 40 50 b. If this project is a public sector project (i.e. its ROR is low). What value should we choose as the ROR for the 50 project? Put integer number followed immediately 75 by% 100 (O00TS x) Md
K An analysis of accidents in a rural state indicates that widening a highway from 30 ft to 40 ft will decrease the annual accident rate from 1,270 to 660 per million vehicle-miles Calculate the average daily number of vehicles that should use the highway to justify widening on the basis of the following estimates: (1) the average loss per accident is $1,000, (ii) the cost of widening is $107,000 per mile (iii) the useful life of the widened road is 25 years; (iv) annual maintenance costs are 3% of the capital investment and (v) MARR is 12% per year. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. Choose the correct answer below OA. The average daily number of vehicles is about 36 vehicles per day OB. The average daily number of vehicles is about 61 vehicles per day OC. The average daily number of vehicles is about 70 vehicles per day OD. The average daily number of vehicles is about 43 vehicles per day OE. The average daily…

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