With the estimates shown below, Sarah needs to determine the trade-in (replacement) value of machine X that will render its AW equalto that of machine Y at an interest rate of 8.00% per year. Determine the replacement value.Market Value, $Annual Cost, $ per YearSalvage ValueLife, YearsThe replacement value is $Machine X?-59500195003Machine Y90000-40,000 for year 1,increasing by 2000 peryear thereafter.240005

The problem pertains to the annual worth of the machines. The annual worth is the annual cash flow…

Answered: With the estimates shown below, Sarah…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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I just need to understand why it is 195 instead of 856.
A $2500 computer system can be leased for $79 per month for 3 years. After 3 years, it can be purchased for $750. This is also the salvage value if the system was purchased originally. What is the effective annual rate for leasing the computer? Ans. i = 1.75% r= 23.10% Show your ful detailed solutions...
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What is the Delta IRR of the difference between the cash flow of the machine with the higher initial value and the lower initial value with the following data? Benefits are constant overall years. Machine A Machine B Initial cost $125,000 $175,000 Life in years 3 Salvage after life 15% 15% Benefits per year $72,000 $81,000 Costs per year $15,800 $24,200 Inflation 2.50% Costs keep increasing at 2.5% every year even when a new machine is bought. a. 17.53% b. 21.86% c. 33.8% d. 41.75%
Lim Bon Fing Y Hermanos Inc has offered for sale its two-storey building in thecommercial district of Cebu City. The building contains two stores on the ground floor anda number of offices on the second floor.A prospective buyer estimates that if he buys this property, he will hold it for about 10years. He estimates that the average receipts from the rental during this period to beP350,000.00 and the average expenses for all purpose in connection with its ownershipand operation (maintenance and repairs, janitorial services, insurance, etc.) to beP135,000.00. He believes that the property can be sold for a net of P2,000,000 at the endof the 10th year. If the rate of return on this type of investment is 7%, determine thecash price of this property for the buyer to recover his investment with a 7% return beforeincome taxes.ANSWER: P2,526,768.61
Given the two machines' data Machine A Machine B First Cost P8.000.00 P14,000.00 Salvage value 2.000.00 Annual operation 3,000.00 2,400.00 Annual maintenance 1.200.00 1,000.00 Taxes and insurance 3% 3% Life, years 10 15 Money is worth at least 16% Using equivalent uniform annual cost method, determine the value of alternative A and alternative B:
Answer: 1,321406.181
* 8
Given the two machines' data First Cost Salvage value Annual operation Annual maintenance Taxes and insurance Machine A P8,000.00 0 3.000.00 1,200.00 3% 10 ANSWER for ALTERNATIVE A: Blank 1 ANSWER for ALTERNATIVE B: Blank 2 Machine B P14,000.00 2.000.00 2.400.00 1.000.00 3% 15 Life, years Money is worth at least 16% Using equivalent uniform annual cost method, determine the value of alternative A and alternative B:
2.7 A machine cost $315000 to purchase . Fuel , oil, grease and minor maintenance are estimated to cost $53.50 per operating hours. A set of tires cost $16000 to replace and their estimated life is 3100 user hours. A $ 17000 major repair will probably be required after 6200 hr of use. The machine is expected to lat for 9300 hr. after which it will be sold at a price (salvage value ) equal to 13% of the original prurchae price . A final the owner of the machine charger per hours of use, if it is expected that the machine will operated 3100 per year ? the compnay's cost -of -capital rate is 7.25%.
A $2500 computer system can be leased for $79 per month for 3 years. After 3 years, it can be purchased for $750. This is also the salvage value if the system was purchased originally. What is the effective annual rate for leasing the computer? Ans. r = 1.75% and Effective Annual Annual Rate = 23.1% Please shows the formula used dont make a shortcut answer. Provide full detailed solution.

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