Two lathes are being considered in the manufacture of certain machine parts. Data is given below, all cost in peso: REQUIRED: a. Determine the number of machine parts/year that could be produced so that 2 lathes will be equally economical if the MARR is 18%. Use AWM b. If the number of parts is 10,000 units, which lathe will you recommend? Use ROR c. If the number of parts is 10,000 units, which lathe will you recommend? Use PWM
Two lathes are being considered in the manufacture of certain machine parts. Data is given below, all cost in peso: REQUIRED: a. Determine the number of machine parts/year that could be produced so that 2 lathes will be equally economical if the MARR is 18%. Use AWM b. If the number of parts is 10,000 units, which lathe will you recommend? Use ROR c. If the number of parts is 10,000 units, which lathe will you recommend? Use PWM
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Two lathes are being considered in the manufacture of certain machine parts. Data is given below, all cost in peso:
REQUIRED:
a. Determine the number of machine parts/year that could be produced so that 2 lathes will be equally economical if
the MARR is 18%. Use AWM
b. If the number of parts is 10,000 units, which lathe will you recommend? Use ROR
c. If the number of parts is 10,000 units, which lathe will you recommend? Use PWM
Transcribed Image Text:1.
Two lathes are being considered in the manufacture of certain machine parts. Data is given below, all
cost in peso:
First Cost
Salvage Value
Annual Maintenance
Operation, Cost/hour
Life, in years
Time per part (hours)
LATHE A
40,000
5,000
2,000
LATHE B
56,000
7,000
2,800
3.5
12
4
10
0.40
0.25
REQUIRED:
a. Determine the number of machine parts/year that could be produced so that 2 lathes will be equally economical if
the MARR is 18%. Use AWM
b. If the number of parts is 10,000 units, which lathe will you recommend? Use ROR
If the number of parts is 10,000 units, which lathe will you recommend? Use PWM
C.
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