Question

An injection molding system has a first cost of $160,000 and an annual operating cost of $81,000 in years 1 and 2, increasing by $5,500 per year thereafter. The salvage value of the system is 25% of the first cost regardless of when the system is retired within its maximum useful life of 5 years. Using a MARR of 8% per year, determine the ESL and the respective AW value of the system.

The ESL is 5 Correct year(s) and AW value of the system is $_______ .

The answer is not 477,254.77

Answer 1

	0	1	2	3	4	5
First Cost	160,000.00	-	-	-	-	-
Annual Operating cost	-	81,000.00	81,000.00	86,500.00	92,000.00	97,500.00
Salvage value (160,000*25%)	-	-	-	-	-	(40,000.00)
Total costs	160,000.00	81,000.00	81,000.00	86,500.00	92,000.00	57,500.00
Present value factor (8%)	1.00	0.93	0.86	0.79	0.74	0.68
Present value of costs	160,000.00	75,006.00	69,417.00	68,681.00	67,620.00	39,157.50
Ans:	479,881.50

The AW value of the system is $479,881.5