Question

Section 1: Before-Tax Analysis of the Existing Press Details: 1. Current market value of the existing press=$430,000. 2. Before-Tax MARR=10%. 3. Inflation rate=0%. 4. Annual operating and maintenance expenses (O+M) as shown in the table. Before-Tax Analysis of the Existing Press EOY Market Capital Marginal AEC If Kept "n" Value Recovery O&M Cost Through Year "n" 430,000 322,500 75,000 2 241,875 90,000 181,406 108,000 BB 136,055 129,600 сс 102,041 155,520 76,531 186,624 DD 6 The dollar amount of cell AA (nearest 100) is a) 76,900, b) 84,700; c) 88,500, d) 91,100. The dollar amount of cell BB (nearest 100) is a) 192,700; b) 198,200, c) 208,000, d) 216,100. 3. The dollar amount of cell CC (nearest 100) is a) 186,900; b) 199, 200, c) 204,800, d) 207,400. 4. The dollar amount of cell DD (nearest 100) is a) 192,900; b) 199,800; c) 203,000; d) 206,900.

Answer 1

Formula MVn-1 - MVn MARR MVn-1 L+CC CR + O&M MC*P/F, 10%, n) Pn+Sn-1 s*(A/P, 10%, n) Cumulative PV Cost of capital (CC) Capital recovery (CR) Marginal cost (MC) EOY (n) Loss in MV (L) O&M PV of MC (P) (s) AEC Market value (MV) 430000 322500 241875 181406 136055 102041 76531 107500 80625 60469 45351 34014 255101 430001 32250 24187.5 18140.6 13605.5 10204.11 150500 112875 84657 63492 476201 35714 750001 90000 108000 129600 1555201 186624 225500 202875 192657 193091.6 203139.5 222338.1 205000 167665 144746 131884 126134 125504 205000 372665 517411 649295 775429 900933 225500 214726 208059 204834 204556 206861

Answer cells have been highlighted in the table.

1). Cell AA: 84,700 (Option b)

2). Cell BB: 192,700 (Option a)

3). Cell CC: 204,800 (Option c)

4). Cell DD: 206,900 (Option d)