ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Chapter 13, Problem 8P
To determine
To find: Economical life of machine.
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What is the book value (to the nearest cent) for the asset in year 1 if straight-line method is used?
Cost of
$50,000
Asset
Useful Life 6
Salvage
$4,000
Value
Salim Service company owns several taxis that were purchased four years ago for
$27000 each. The current market value is $10000 each. If they are kept for another
6 years, they can be sold for $2000 each. The annual maintenance cost per cab is
$900 a year. Salim Service is looking at replacing the cabs with the option to lease
new cabs at an annual cost of $9000 per year per cab which includes free
maintenance. How much more would it cost them per year to switch to leasing?
Assume an interest rate of 9%.
3. Angstrom Technologies intends for the company to use the newest and finest equipment in its labs. Precision measurement
equipment was purchased 7 years ago for $160,000. Last year a replacement study was performed with the decision to retain for 3
more years. The situation has changed. The equipment is estimated to have a value of $8000 if "scavenged" for parts now or
anytime in the future. If kept in service, it can be minimally upgraded at a cost of $43,000 to make it usable for up to 2 more years.
Its operating cost is estimated at $22,000 the first year and $25,000 the second year. Alternatively, the company can purchase a
new system that will have an equivalent annual worth of $47,063 per year over its ESL. The company uses a MARR of 10% per year.
Use annual worth analysis to determine when the company should replace the machine.
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
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