Engineering Economy, Student Value Edition (17th Edition)
17th Edition
ISBN: 9780134838137
Author: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 9, Problem 26P
(a):
To determine
Calculate the economic life.
(b):
To determine
Calculate the economic life.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Please solve without using excel, solve using formulas or tables
Please no written by hand and no image
A machine that has been used for 8 years has a market value of $2,500 now, which decreases by $100 each year for the next 5 years. Maintenance costs this year are $5k, and for the next 5 years they are estimated at $6k, $7k, $8k and $9k. Determine the marginal cost of extending the service for two years if the MARR is 12%.
Answer the questions:
a) How much is the loss in market value in year 2?
b) How much is the loss in interest in year 2?
c) What is the Marginal Cost in year 2?
d) If the machine's minimum EUAC is $5,500, when, in years, should the machine be replaced?
Chapter 9 Solutions
Engineering Economy, Student Value Edition (17th Edition)
Ch. 9 - Prob. 1PCh. 9 - Prob. 2PCh. 9 - Prob. 3PCh. 9 - Prob. 4PCh. 9 - Prob. 5PCh. 9 - Prob. 6PCh. 9 - Prob. 7PCh. 9 - A city water and waste-water department has a...Ch. 9 - Prob. 9PCh. 9 - Prob. 10P
Ch. 9 - Prob. 11PCh. 9 - Prob. 12PCh. 9 - Use the PW method to select the better of the...Ch. 9 - Prob. 14PCh. 9 - Prob. 15PCh. 9 - Prob. 16PCh. 9 - Prob. 17PCh. 9 - Prob. 18PCh. 9 - Prob. 19PCh. 9 - Prob. 20PCh. 9 - Prob. 21PCh. 9 - Prob. 22PCh. 9 - Prob. 23PCh. 9 - Prob. 24PCh. 9 - Prob. 25PCh. 9 - Prob. 26PCh. 9 - Prob. 27SECh. 9 - Prob. 28SECh. 9 - Prob. 29CSCh. 9 - Prob. 30CSCh. 9 - Prob. 31CSCh. 9 - Prob. 32FECh. 9 - Prob. 33FECh. 9 - Prob. 34FECh. 9 - Prob. 35FECh. 9 - Prob. 36FE
Knowledge Booster
Similar questions
- Please no written by hand solutionarrow_forwardThe marginal costs of a defender for each of the final four years of service are $1,300, $1,600, $2,000 and $2,400, respectively. If the challenger's minimum EUAC is $2,055, the defender should be replaced at the end of what year? (Note: Choose "0" if recommending to replace immediately) ○ A. 4 B. 1 ○ C. 0 ○ D. 2 ○ E. 3arrow_forwardAn equipment cost $90.000 initially. The market value the first year was 80,000 and has been declining at the rate of $6.000 yearly. The O & M costs in year 1 were $7.000 and have been increasing by $2.000 from year 2. Determine the minimum cost life of this equipment for a MARR of 10 %. Based on the chart below, a. what is the economic life of this piece of equipment. b. What is the minimum economic cost? OM cost PWCost Year Cost Salvage EUAC 90000 1 7000 $96,363.64 80000 ($26,000.00) 9000 $103,801.65 74000 (524.571.43) 3 11000 $112,066.12 68000 ($24.519.64) 4 13000 $120,945.29 62000 ($24.795.52) 15000 $130,259.11 56000 ($25,189.37) 6 17000 $139,855.17 50000 (525.631.41) 7 19000 $149.605.17 44000 (526.091.88) 8 21000 $159,401.83 38000 ($26,556.05) 9. 23000 $169,156.07 32000 ($27,015.85) 10 25000 $178,794.65 26000 (527.466.63) O a. 6 years b. $27,466.63 O a. 8 years b. $80.000 O a. 3 years b. $25,519.64 O a. 10 years b. $24.664.99arrow_forward
- answer quick please. Do not need full workarrow_forwardQuestion 2 With the estimates shown below, Sarah needs to determine the trade-in (replacement) value of machine X that will render its AW equal to that of machine Y at an interest rate of 10% per year. Determine the replacement value. Machine X Machine Y Market Value, $ ? 87,000 Annual Cost, $ per Year −58,000 −40,000 for year 1,increasing by 2000 per year thereafter. Salvage Value 16,500 21,000 Life, Years 3 5 The replacement value is $ . Full explain this question and text typing work only thanksarrow_forwardThe following tables show the marginal costs of a defender over its remaining four years of service life. If the challenger's minimum EUAC is $29,403, what is the most appropriate replacement decision? Year 1234 Marginal cost $31,053 $26,353 $28,003 $32,803 ○ A. No decision can be made unless additional calculations are made on the challenger B. Replace the defender now OC. No decision can be made unless additional calculations are made on the defender ○ D. Keep the defender for at least one more yeararrow_forward
- An existing robot can be kept if $2,000 is spent now to upgrade it for future service requirements. Alternatively, the company can purchase a new robot to replace the old robot. The following estimates have been developed for both the defender and the challenger. Defender Challenger Current MV…arrow_forwardWe bought a CNC machine 3 years ago for $100,000 with a salvage value of $20,000 after 8 years. It has an annual operating cost of $30,000. A new machine is available at a price of $120,000, a life of 10 years and a salvage value of $30,000. The annual operating cost for this machine is $15,000. The market value for the CNC machine is $70,000 now. At MARR= 10% per year should we keep the CNC machine or replace it?arrow_forwardA commercial 3D printer is purchased for $280,000. The salvage value of the printer decreases by 40% each year that it is held. The cost to operate and maintain the machine the first year it is used is $12,000; these costs increase by $4,500 each year. What is the optimal replacement interval and minimum EUAC for the printer, assuming a MARR of 13% is used? Click here to access the TVM Factor Table Calculator. ORI: EUAC*: $ years Carry all interim calculations to 5 decimal places and then round your final answers to a whole number. The tolerance is ±5 for the EUAC*.arrow_forward
- Economics A commercial 3D printer is purchased for $310,000. The salvage value of the printer decreases by 45% each year that it is held. The cost to operate and maintain the machine the first year it is used is $12,000; these costs increase by $5,500 each year. What is the optimal replacement interval and minimum EUAC for the printer, assuming a MARR of 11% is used? ORI: years EUAC*: $arrow_forward(Chapter 13) A $20,000 machine will be purchased by a company with an MARR of 10%. It will cost $5,000 to install and removal costs are insignificant. What is its economic life and minimum EUAC cost given the following O&M costs: YR, n 1 2 3 4 5 O&M $5,000 $8,000 $11,000 $14,000 $17,000arrow_forwardThe Delta firm intends to buy a device called machine X. Machine X would cost $25,000 and have little salvage value after 10 years of use. The machine is anticipated to bring around $10,000 annually. Do the simple payback period calculation.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial Economics: Applications, Strategies an...EconomicsISBN:9781305506381Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. HarrisPublisher:Cengage Learning
Managerial Economics: Applications, Strategies an...
Economics
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:Cengage Learning