Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
17th Edition
ISBN: 9780134870069
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
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Chapter 8, Problem 31P
To determine

Calculate the equivalent annual worth.

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A company has invested in machinery that $23,000 to purchase and install and the company purchased a 3 year warranty for $5,000. The warranty covers all maintenance and repairs for three years with no cost to the company. At year 4, the maintenance costs are estimated at $2,000 and will increase by $1,200 per year after that. Operating costs are expected to be $800 every year. The machinery will last nine years. If the interest rate is 6%, what is the machinery's economic life that minimizes the EUAC?
what is the EUAC corresponding to an overhaul cost of 4000 at year 3 for a machine with 7 years of useful life? use i=8%
Milwaukee Machine Tool is planning to buy a machine for S15,000 with a salvage value of 20% of the initial cost after a life of 10 years. The company estimates it will need $900 for supplies, $250 for maintenance, $100 for utilities and S1,500 for overhead. They estimate these will increase by S1200, 8%, 10% and $200 respectively over the 10-year machine life. If interest rate is 5% per year, what is the net present value of the project? -$78,301.03 2 -$82,216.08 3 -$93,301.03 -$52,216.08
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