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Solve it correctly please. I will rate.
![A company has asked to you help them select anew
backhoe. You have a choice between a wheel-mounted
version, which costs $50,000 and has an expected life
of 5 years and salvage value of $2000, and a
track-mounted one, which costs $80,000, with a 5-year
life and an expected salvage value of $10,000. Both
machines will achieve the same productivity. MARR is
8% per year. Which one will you recommend?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F68c808ee-75e7-4009-83cb-f7843bb80fa5%2F6dbe214f-1862-4d6a-af4a-94bc890f4fc9%2Ffrfdkin_processed.jpeg&w=3840&q=75)
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- Dick Dickerson Construction, Inc. has asked you to help them select a new backhoe. You have a choice between a wheel-mounted version, which costs $60,000 and has an expected life of 5 years and a salvage value of $2000, and a track-mounted one, which costs $80,000, with a 7-year life and an expected salvage value of $10,000. Both machines will achieve the same productivity. Interest is 8%. Which one will you recommend? Use an annual worth analysis.Old Southwest Canning Co. has determined that any one of four machines can be used in its chilicanning operation. The cost of the machines are estimated below, and all machines have a 5-year life. If the minimum attractive rate of return is 25% per year, determine which machine should be selected on the basis of a rate of return analysis. Machine First Cost, $ AOC, $ 1 −28,000 −20,000 2 −51,000 −12,000 3 −32,000 −19,000 4 −33,000 −18,000The Fence Company is setting up a new production line to produce top rails. The relevant data for two alternatives are shown below. Solve, a. Based on MARR of 8%, determine the annual rate of production for which the alternatives are equally economical. b. If it is estimated that production will be 300 top rails per year, which alternative is preferred and what will be the total annual cost?
- The firm is considering two machines: Machine A with initial investment of $10,000 and annual maintenance cost of $1.000. The life of the machine A is 4 years. Machine B with initial investment of $20,000 and annual maintenance cost of $800. The life of the machine B is 6 years. If the required rate of return is 10%, calculate the equivalent annual cost (EAC) of each machine and which machine company must choose? (A) The EAC of Machine A is $4,154.71 and Machine B is $5,392.15. The Company must choose Machine B. (B) The EAC of Machine A is $4,154.71 and Machine B is $5,392.15. The Company must choose Machine A. (C) The EAC of Machine A is $3,169.87 and Machine B is $3,484.21. The Company must choose Machine B. (D) The EAC of Machine A is $3,169.87 and Machine B is $3,484.21. The Company must choose Machine A. Answer A D.A casting company is considering the replacement analysis of a furnace. If it is bought from A factory, annual operating and maintenance costs will be 50.000 TL/year. It can be kept for 10 years. The purchase cost is 300.000 TL. The scrap value is 15.000 TL. If the furnace is bought from the B factory, the annual operating and maintenance cost will be 30.000 TL/year. Economical life of this machine is 5 years. The purchase cost is 250.000 TL and the Scrap Value is 25.000 TL. Capital cost is 25% for two factories. Based on these data, what will be the present value (TV) of the annual operating expense of alternative A? A) 188525 B) 198525 C) 178525 D) 158525 E) 168525Do this by creating a table in Excel
- You need to select a machine for the robotized welding process at your factory. There are two machines in market that can do this job, machine A and machine B. Machine A: First cost is $63,000 , Annual Operating Cost is $4,000, and Salvage value of $15,000 with useful life of 3 years. If the life of machine B is 9 years, the NPV of machine A needed for the sake of comparison at MARR 15% per year is closest to:The firm is considering two machines: Machine A with initial investment of $10,000 and annual maintenance cost of $1,000. The life of the machine A is 4 years. Machine B with initial investment of $20,000 and annual maintenance cost of $800. The life of the machine B is 6 years. If the required rate of return is 10%, calculate the equivalent annual cost (EAC) of each machine and which machine company must choose?Bailey, Inc., is considering buying a new gang punch that would allow them to produce circuit boards more efficiently. The punch has a first cost of $125,000 and a useful life of 15 years. At the end of its useful life, the punch has no salvage value. Labor costs would increase $1,500 per year using the gang punch, but raw material costs would decrease $10,000 per year. MARR is 5%/year. Part a Your answer is incorrect. What is the internal rate of return of this investment? % Carry all interim calculations to 5 decimal places and then round your final answer to 1 decimal place. The tolerance is ±0.2.
- You must analyze a potential new product—a caulking compoundthat Cory Materials’ R&D people developed for use in the residential constructionindustry. Cory’s marketing manager thinks the company can sell 115,000 tubes peryear at a price of $3.25 each for 3 years, after which the product will be obsolete. Therequired equipment would cost $150,000, plus another $25,000 for shipping and installation.Current assets (receivables and inventories) would increase by $35,000, while currentliabilities (accounts payable and accruals) would rise by $15,000. Variable cost perunit is $1.95, fixed costs (excluding depreciation) would be $70,000 per year, and fixedassets would be depreciated under MACRS with a 3-year life. (Refer to Appendix 12Afor MACRS depreciation rates.) When production ceases after 3 years, the equipmentshould have a market value of $15,000. Cory’s tax rate is 40%, and it uses a 10% WACCfor average-risk projects.a. Find the required Year 0 investment and the project’s annual…Bailey, Inc., is considering buying a new gang punch that would allow it to produce circuit boards more efficiently. The punch has a first cost of $100,000 and a useful life of 15 years. At the end of its useful life, the punch has no salvage value. Labor costs would increase $2,000 per year using the gang punch, but raw material costs would decrease $12,000 per year. MARR is 5%/ year. a. What is the discounted payback period for this investment? b. If the maximum attractive DPBP is 3 years, what is the decision rule for judging the worth of this investment? c. Should Bailey buy the gang punch based on DPBP?You must analyze a potential new product—a caulking compound that Cory Materials’ R&D people developed for use in the residential construction industry. Cory’s marketing manager thinks the company can sell 115,000 tubes per year at a price of RM3.25 each for 3 years, after which the product will be obsolete. The required equipment would cost RM150,000, Variable costs would be RM1.60 per unit, fixed costs (exclusive of depreciation) would be RM80,000 per year, and the depreciation on the equipment is 20,000 per annum. Cory’s tax rate is 35%, and it uses a 9% WACC for average-risk projects. If the number of tubes produced declined by 30% from the expected level, by how much would the project's NPV change?