Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Question
Chapter 14, Problem 40P
(a):
To determine
Calculate the cash flow.
(b):
To determine
Calculate the breakeven market value.
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A high-speed electronic assembly machine was purchased two years ago for $50,000. At the present time, it can be sold for $26,000 and replaced by a newer model
having a purchase price of $37,500; or it can be kept in service for a maximum of one more year. The new assembly machine, if purchased, has a useful life of not
more than two years. If the before-tax MARR is 12%, when should the old assembly machine be replaced? Use the following data table for your analysis.
Challenger
Defender
O&M Costs
$11,500
13,000
Year
0
Market Value
$37,500
31,000
1
2
26,000
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year.
The minimum EUAC value of the challenger is $
Market Value
$26,000
16,500
(Round to the nearest dollar.)
O&M Costs
$15,500
A high-speed electronic assembly machine was purchased two years ago for $50,000. At the present time, it can be sold for $24,000 and replaced by a newer model having a purchase price of $41,500: or it can be kept in service for a maximum of one more
year. The new assembly machine, if purchased, has a useful life of not more than two years. If the before-tax MARR is 18%, when should the old assembly machine be replaced? Use the following data table for your analysis.
Challenger
TAerket Volye
$41,500
De fender
DRM Coste
DRM Cost
Merhel Voiue
524.000
30.000
17 500
$14,000
58.000
12,000
24,000
A Click the icon to view the interest and annuity table for discrete compounding when the MARR Is 18% per year
The minimum EUAC value of the challenger is S (Round to the nearest dollar.)
The marginal cost of keeping the defender in service for one more year is $(Round to the nearest dallar.)
The old assembly machine should be replaced
immediately
in one year
A high-speed electronic assembly machine was purchased two years ago for $50,000. At the present time, it can be sold for $27,000 and replaced by a newer model having a purchase price of $44,000; or it can
be kept in service for a maximum of one more year. The new assembly machine, if purchased, has a useful life of not more than two years. If the before-tax MARR is 12%, answer the following two questions:
Challenger
O&M Costs
Year
Market Value
0
$44,000
1
2
34,000
27,000
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year.
$12,000
13,000
Defender
Market Value
$27,000
19,000
O&M Costs
$14,000
1. The minimum EUAC value of the challenger is
○ A. $30,390
B. $25,771
○ C. $30,554
D. $27,280
○ E. $24,080
2. The marginal cost of keeping the defender in service for one more year is
OA. $33,000
B. $25,240
C. $10,280
OD. $11,240
O E. $22,000
Chapter 14 Solutions
Contemporary Engineering Economics (6th Edition)
Ch. 14 - Prob. 1PCh. 14 - Prob. 2PCh. 14 - Prob. 3PCh. 14 - Prob. 4PCh. 14 - Prob. 5PCh. 14 - Prob. 6PCh. 14 - Prob. 7PCh. 14 - Prob. 8PCh. 14 - Prob. 9PCh. 14 - Prob. 10P
Ch. 14 - Prob. 11PCh. 14 - Prob. 12PCh. 14 - Prob. 13PCh. 14 - Prob. 14PCh. 14 - Prob. 15PCh. 14 - Prob. 16PCh. 14 - Prob. 17PCh. 14 - Prob. 18PCh. 14 - Prob. 19PCh. 14 - Prob. 20PCh. 14 - Prob. 21PCh. 14 - Prob. 22PCh. 14 - Prob. 23PCh. 14 - Prob. 24PCh. 14 - Prob. 25PCh. 14 - Prob. 26PCh. 14 - Prob. 27PCh. 14 - Prob. 28PCh. 14 - Prob. 29PCh. 14 - Prob. 30PCh. 14 - Prob. 31PCh. 14 - Prob. 32PCh. 14 - Prob. 33PCh. 14 - Prob. 34PCh. 14 - Prob. 35PCh. 14 - Prob. 36PCh. 14 - Prob. 37PCh. 14 - Prob. 38PCh. 14 - Prob. 39PCh. 14 - Prob. 40PCh. 14 - Prob. 41PCh. 14 - Prob. 42PCh. 14 - Prob. 43PCh. 14 - Prob. 44PCh. 14 - Prob. 45PCh. 14 - Prob. 46PCh. 14 - Prob. 47PCh. 14 - Prob. 48PCh. 14 - Prob. 49PCh. 14 - Prob. 1STCh. 14 - Prob. 2STCh. 14 - Prob. 3ST
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