Contemporary Engineering Economics (6th Edition)
Contemporary Engineering Economics (6th Edition)
6th Edition
ISBN: 9780134105598
Author: Chan S. Park
Publisher: PEARSON
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Chapter 7, Problem 35P
To determine

Calculate the annual revenue.

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A semiconductor chip maker purchased a small manufacturing process plant for $2,131,020. The money coming in from that purchase was determined to be $500,000 annually in before-tax cash flow during its 10-year use. The net cash flow after tax is $300,000. If the chip maker wants to realize a 10% return on its investment after tax, for how many more years should the plant operate? (hint, tables)
You are considering a hydraulic excavator. This machine will have an estimated service life of 10 years, with a salvage value of 10% of the investment cost. Its expected savings from annual operating and maintenance costs are estimated to be SR 60,000. To expect a 14% rate of return on investment, what would be the maximum amount that you are willing to pay for the machine: (Choose the closest answer) Hint: solve for the capital cost (I) by equating recovery cost (CR) with operating and maintenance cost (OC). a) SR 297,594 b) SR 355,104 c) SR 250,417 d) SR 321,643 e) SR 356,218
PLEASE ANSWER AND SHOW SOLUTION Machine cost = $15,000; Life = 8 years; salvage value = $3000. What minimum cash return would the investor demand annually from the operation of this machine if he desires interest annually at the rate of 8% in his investment and accumulates a capital replacement fund by investing annual deposits at 5%?

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Contemporary Engineering Economics (6th Edition)

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