The difference between EUAC’s of upgrading option and labor-intensive process option
Answer to Problem 34P
The difference in EUAC’s is $5,325
Explanation of Solution
Upgrade option
Cost of upgrade = $12,000, i = 15%, n = 9 years
Labor intensive option
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Chapter 13 Solutions
ENGR.ECONOMIC ANALYSIS
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- The cost of producing per piece of an AVR is P23.00 for labor and P37.00 for direct materials. Another variable cost is P1.00 per unit AVR to be produced. The fixed costs is P100,000.00 per month. The AVR can be sold for P75.00 each. a. determine the number of units to be produced per month to break even. b. how many units are needed to earn an amount of P200,000/month?arrow_forwardA product that has a list price by the company to be 589 while the variable cost of manufacturing is 340. 1. What is the fixed cost per year that the company can afford to breakeven with sales 9000/year? 2. If the fixed cost of the company is actually 750,000 per year, what is the profit at a sales level of 7000 units?arrow_forwardHuntington Medical Center purchased a used low-field MRI scanner 2 years ago for $445,000. Its operating cost is $375,000 per year and it can be sold for $135,000 anytime in the next 3 years. The Center’s director is considering replacing the presently owned MRI scanner with a state-of-the-art 3 Tesla machine that will cost $2 million.The operating cost of the new machine will be $260,000 per year, but it will generate extra revenue that is expected to amount to $675,000 per year. The new unit can probably be sold for $775,000 3 years from now. You have been asked to determine how much the presently owned scanner would have to be worth on the open market for the AW values of the two machines to be the same over a 3-year planning period. The Center’s MARR is 9% per year. The presently owned scanner should be worth $ on the open market.arrow_forward
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