ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
expand_more
expand_more
format_list_bulleted
Question
Chapter 13, Problem 38P
(a)
To determine
To find: The new asset’s minimum cost life.
(b)
To determine
To find: The life of the asset when it should be replaced with the new asset.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
A company in Denver started a new production line to manufacture a new part. The table below showed the costs. If the parts will be sold at the selling price = $15.00/unit, what annual production quantity need to be manufactured to make it breakeven?
Material and Parts Cost $3.00/unit, Labor Costs $4.00/unit, Overhead Cost $2,500,000, Annual Production Quantity ? units
A company is developing a new electronic
product. It expects to spend $38 million on
Research and Development and then another $6
million on Manufacturing Engineering. After
completing all this, the company expects a cost of
$15 per unit to manufacture and plans to build in a
profit of $5 per unit into the price. The company
needs to recover the cost of R&D plus
Manufacturing Engineering over five years
through sales of 4 million units over those five
years. What will the company need to establish as
the sales price for the unit?
What is the annual worth of this investment? $
Chapter 13 Solutions
ENGR.ECONOMIC ANALYSIS
Ch. 13 - Prob. 1QTCCh. 13 - Prob. 2QTCCh. 13 - Prob. 3QTCCh. 13 - Prob. 4QTCCh. 13 - Prob. 5QTCCh. 13 - Prob. 1PCh. 13 - Prob. 2PCh. 13 - Prob. 3PCh. 13 - Prob. 4PCh. 13 - Prob. 5P
Ch. 13 - Prob. 6PCh. 13 - Prob. 7PCh. 13 - Prob. 8PCh. 13 - Prob. 9PCh. 13 - Prob. 10PCh. 13 - Prob. 11PCh. 13 - Prob. 12PCh. 13 - Prob. 13PCh. 13 - Prob. 14PCh. 13 - Prob. 15PCh. 13 - Prob. 16PCh. 13 - Prob. 17PCh. 13 - Prob. 18PCh. 13 - Prob. 19PCh. 13 - Prob. 20PCh. 13 - Prob. 21PCh. 13 - Prob. 22PCh. 13 - Prob. 23PCh. 13 - Prob. 24PCh. 13 - Prob. 25PCh. 13 - Prob. 26PCh. 13 - Prob. 27PCh. 13 - Prob. 28PCh. 13 - Prob. 29PCh. 13 - Prob. 30PCh. 13 - Prob. 31PCh. 13 - Prob. 32PCh. 13 - Prob. 33PCh. 13 - Prob. 34PCh. 13 - Prob. 35PCh. 13 - Prob. 36PCh. 13 - Prob. 37PCh. 13 - Prob. 38PCh. 13 - Prob. 39PCh. 13 - Prob. 40PCh. 13 - Prob. 41PCh. 13 - Prob. 42PCh. 13 - Prob. 43PCh. 13 - Prob. 44PCh. 13 - Prob. 45PCh. 13 - Prob. 46PCh. 13 - Prob. 47PCh. 13 - Prob. 48PCh. 13 - Prob. 49PCh. 13 - Prob. 50PCh. 13 - Prob. 51PCh. 13 - Prob. 52PCh. 13 - Prob. 53PCh. 13 - Prob. 54PCh. 13 - Prob. 55PCh. 13 - Prob. 56P
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Similar questions
- Answer FAST.... it's urgent A new office building has been constructed at a cost of $3,000,000. It is estimated to have a life of 50 years with a value at that time of $200,000. It will have maintenance costs of $10,000 per year. It will also have major repairs costing $80,000 that occur at years 10, 20, 30 and 40. It will have additional repairs at the end of year 25 costing $250,000. Determine the equivalent uniform annual cost if the rate of interest of the firm is 7%arrow_forwardThe Rosebud Motel is a must-stay for any road-tripper or weary traveler. The motel fils each of its 24 rooms for 200 nights each during the year. Annual fixed costs total $160,000. The variable cost of one night's stay is $100. The motel owners expect a 50% return on the company's $500,000 of assets each year. The Rosebud Motel is currently the only place to stay for 50 miles. What should Rosebud's cost-plus price be if sales volume and costs are expected to stay consistent? OA. $133.33 OB. $185.42 OC. $2,150.00 OD. $152.08 OE. The Rosebud Motel would not set its price as it is a price-taker in this market.arrow_forwardIf the profit function for selling smart phone screen magnifier is -4500p2 + 561500p – 11898000, what selling price should Pineapple Store use to maximize profits? $62.39 $264.40 $32.95 $7.37arrow_forward
- Get a similar question A state lotto has a prize that pays $1,800 each week for 20 years. Find the total value of the prize: $ 1872000 If the state can earn 9% interest on investments, how much money will they need to put into an account now to cover the weekly prize payments? $ Reminder: There are 52 weeks in a year. Submit Questionarrow_forwardRespond to the question with a concise and accurate answer, along with a clear explanation and step-by-step solution, or risk receiving a downvote. Modifying an assembly line has a first cost of $165,000 and its salvage value is $0. The firm’s interest rate is 10%. The savings shown in the table depend on whether the assembly line runs one, tow, or three shifts and on whether the product is made for 8 or 10 years. Calculate the expected present worth. Round to the nearest cent. Shifts/day Savings P(S) Useful Life P(L) 1 $27,500 25% 8 65% 2 $30,000 40% 10 35% 3 $32,500 35%arrow_forwardYou are weighing the economics of installing a triple-glazed energy efficient window system in your building. The following life cycle costs and savings are provided. The study period is 25 years, and the discount rate is 10%. Is this an economically viable approach based on the Savings-to-Investment Ratio (SIR)? Triple- Glazed Energy Efficient Windows: Window Quantity takeoff: 10000 sf Initial Cost: $100/sf Annual Operating Costs: $2.5/sf Annual Energy Saving: $10/sfarrow_forward
- An automobile spare part is sold for $15 per unit. The VC are $3 per unit, 15000 units of the product are sold annually and a profit of $80,000 is made. The change to be made in the design of the product will increase the VC by 20% and the FC by 10%, and the sales amount will increase to 18000 units. a) At what selling price do we break even? b) What is the annual profit when the selling price remains the same ($12/unit)?arrow_forwardSAUCE uses 300,000 units of part X a year. Average purchase lead time is 20 working days while maximum is 27 working days. The firm's annual operations cover 240 days allowing for shutdowns for plant maintenance, holidays and Sundays. The firm wants to keep safety stock to guard against stock outs. What is the safety stock in units?arrow_forward13,000 6. The Imperial Chemical Company is considering purchasing a chemical analysis machine worth $13,000. Although the purchase of this machine will not produce any increase in sales revenues, it will result in a reduction of labour costs. In order to operate the machine properly, it must be calibrated each year. The machine has an expected life of 6 years, after which it will have no salvage value. The following table summarizes the annual savings in labour cost and the annual maintenance costs in calibration over 6 years: Year (n) Net Cash Flow ($) 0 Costs ($) Savings ($) -13,000 1 2 3 4 2,300 6,000 3,700 2,300 7,000 4,700 2,300 9,000 6,700 2,300 9,000 6,700 5 2,300 9,000 6,700 6 2,300 9,000 6,700 Find the internal rate of return for this project. [6]arrow_forward
- “The higher the MARR, the higher the price that a company should be willing to pay for equipment that reduces annual operating expenses.” Do you agree with this statement? Explain your answer.arrow_forwardJames has a mortgage of $88,500 at 8% for 30 years. The property taxes are $3,700 per year, and the hazard insurance premium is $764.50 per year. Find the monthly PITI payment (in $). (Round your answer to the nearest cent. Use this table as needed.)arrow_forwardXYZ Inc is looking at a project to manufacture widgets. Assume we have the following data: • The initial cost of the project is $1,080,000. • The project is expected to last 7 years, at which time the project will be abandon. • Assume each widget will cost $8.00 each to produce and the selling price will be $12.00. Production fixed costs are expected to be $248,400 annually. • The company has computed that the PVCCATS associated with this project will be $237,600. Also, the company uses a discount rate of 9% for capital projects and XYZ pays tax at a rate of 10%. XYZ is unsure as to how many widgets they will sell annually. The marketing department has provided that the expected number of units sold annually, N is E(N) = 128,000 units with a standard deviation of o= = 21,000 units. (a) Compute the expected NPV, E(NPV) of this project. 数字 (b) Compute the standard deviation of the NPV of this project. 数字 (c) Compute the NPV breakeven point of this project. 数字 units. (d) Based on the…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage LearningManagerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning
Difference between Renewable and Nonrenewable Resources; Author: MooMooMath and Science;https://www.youtube.com/watch?v=PLBK1ux5b7U;License: Standard Youtube License