Two methods can be used to produce expansion anchors. Method A costs $70,000 initially and will have a $18,000 salvage value after 3 years. The operating cost with this method will be $29,000 in year 1, increasing by $4000 each year. Method B will have a first cost of $130,000, an operating cost of $6000 in year 1, increasing by $6000 each year, and a $40,000 salvage value after its 3-year life. At an interest rate of 14% per year, what are the present worth of Method A and Method B? O a. PWA $-133,655 PWB $-129,647 O b. PWA $-133,655 PWB $-125,178 O C.PWA = $-150,260 PWB $-129,647 O d. PWA $-150,260 PWB = $-125,178

Two methods can be used to produce expansion anchors. Method A costs $70,000 initially and will have a $18,000 salvage value after 3 years. The operating cost with this method will be $29,000 in year 1, increasing by $4000 each year. Method B will have a first cost of $130,000, an operating cost of $6000 in year 1, increasing by $6000 each year, and a $40,000 salvage value after its 3-year life. At an interest rate of 14% per year, what are the present worth of Method A and Method B? O a. PWA $-133,655 PWB $-129,647 O b. PWA $-133,655 PWB $-125,178 O C.PWA = $-150,260 PWB $-129,647 O d. PWA $-150,260 PWB = $-125,178

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

A rotational molding operation has fixed costs of $9,000 per year and variable costs of $54 per unit. If the process is automated via conveyor, its fixed cost will be $61,000 per year, but its variable cost will be only $10 per unit. Determine the number of units each year necessary for the two operations to break even. The number of units each year necessary for the two operations to break even is determined to be [
An independent contractor for a transportation company needs to determine whether she should upgrade the vehicle she currently owns or trade her vehicle in to lease a new vehicle. If she keeps her vehicle, she will need to invest in immediate upgrades that cost $4,700 and it will cost $1,450 per year to operate at the end of year that follows. She will keep the vehicle for 6 years; at the end of thi period, the upgraded vehicle will have a salvage value of $4,300. Alternatively, she could trade in her vehicle to lease a new vehicle. Sh estimates that her current vehicle has a trade-in value of $9.300 and that there will be $4,500 due at lease signing. She further estimates that it will cost $3,300 per year to lease and operate the vehicle. The independent contractor's MARR is 12%. Compute the EUAC of both the upgrade and lease alternatives using the insider perspective. Click here to access the TVM Factor Table Calculator. EUAC(keep): EUAC(lease): $ S Carry all interim calculations to…
Two methods can be used to produce expansion anchors. Method A costs $90,000 initially and will have a $16,000 salvage value after 3 years. The operating cost with this method will be $26,000 in year 1, increasing by $3200 each year. Method B will have a first cost of $106,000, an operating cost of $6000 in year 1, increasing by $6000 each year, and a $36,000 salvage value after its 3-year life. At an interest rate of 14% per year, which method should be used on the basis of a present worth analysis? The present worth for method A is $152027 The present worth for method B is $[ Method B is used to produce expansion anchors.
Two processes can be used for producing a polymer that reduces friction loss in engines. Process T will have a first cost of $760,000, an operating cost of $100,000 per year, and a salvage value of $80,000 after its 2-year life. Process W will have a first cost of $1,200,000, an operating cost of $25,000 per year, and a $120,000 salvage value after its 4-year life. Process W will also require updating at the end of year 2 at a cost of $90,000. Which process should be selected on the basis of a present worth analysis at a MARR of 12% per year? The present worth of process T is $-[ and the present worth of process W is $- The process selected on the basis of the present worth analysis is process W
A professional photographer who specializes in wedding-related activities paid $49,000 for equipment that will have a $2000 salvage value after 5 years. He estimates that his costs associated with each event amount to $65 per day. If he charges $300 per day for his services, how many days per year must he be employed in order to break even at an interest rate of 8% per year? The number of days required for break even is determined to be per year.
White Oaks Properties builds strip shopping centers and small malls. The company plans to replace its refrigeration, cooking, HVAC, and other equipment with newer models in the entire center built 9 years ago. The original purchase price of the equipment was $766,000 nine years ago and the operating cost has averaged $240,000 per year. Determine the equivalent annual cost of the installed equipment, if the company can now sell it for $160,000. The company’s MARR is 25% per year. The equivalent annual cost of the installed equipment is $−
ABC Company has revenues of Php500,000, variable costs of Php350,000, and fixed cost of Php135,000. Compute the total revenues needed to breakeven.
4) A company produces a chemical at a rate of 1000 tons/year with a planned sale price of 0.8 TL / kg. The fixed cost is 60000 TL/year and direct production is 5.5 x 106 TL/year at full capacity. Determine the direct product cost per unit product (TL /kg). Find the breakeven capacity of the company for this product. Draw breakeven chart according to determined results in (ii). Calculate the new breakeven point if the price of the product decreased to 0.5 TL/kg.
Required information One of two methods must be used to produce expansion anchors. Method A costs $65.000 initially and will have a $14.000 salvage value after 3 years. The operating cost with this method will be $23,000 per year. Method B will have a first cost of $140,000, an operating cost of $14,000 per year, and a $32.000 salvage value after its 3-year life. The interest rate for both the methods is 15%. Which method should be used on the basis of a present worth analysis? The present worth of method A Is $ and that of method B is $ Method (Cick to solect) v is selected by the company.
A rotational molding operation has fixed costs of $9,000 per year and variable costs of $48 per unit. If the process is automated via conveyor, its fixed cost will be $27,000 per year, but its variable cost will be only $10 per unit. Determine the number of units each year necessary for the two operations to break even. The number of units each year necessary for the two operations to break even is determined to be
Break-Even Point Hilton Enterprises selis a product for $119 per unit. The variable cost is $68 per unit, while faed costs are $436,968. Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $124 per unit a. Break-even point in sales units units b. Break-even point if the selling price were increased to 124 per unit units 00
A manufacturer producer certain items at a labor cost per unit of P 125, material cost per unit is P150, variable cost of P5.00 each. If the item has a selling price of P750, how many units must be manufactured each month for the manufacturer to breakeven if the monthly overhead is P200,000?