A piece of equipment has a first cost of $145,000, a maximum useful life of 7...
Problem 11.017 Economic Service Life A piece of equipment has a first cost of $135,000, a maximum useful life of 7 years, and a market (salvage) value described by the relation S = 120,000 - 21,000k, where k is the number of years since it was purchased. The salvage value cannot go below zero. The AOC series is estimated using AOC = 60,000 + 11,000k. The interest rate is 12% per year. Determine the economic service life and the respective...
11.14 A piece of onboard equipment has a first cost of $600,000, an annual cost of $92,000, and a salvage value that decreases to zero by $150,000 each year of the equipment's maximum useful life of 5 years. Assume the company's MARR is 10% per year. (a) Determine the ESL by hand. (b) Use a spreadsheet with a graph indicating the capital recovery, AOC, and total AW per year to determine the ESL
3. The first cost of a piece of equipment is $12,0oo, the useful life is estimated to be 6 years, and the salvage value is 15% of the first cost. Using DDBM and the SLM depreciation methods, calculate (a) the book value after 3 years, and (b) the rate of depreciation and the depreciation rate amount in year 4 4. Claude is an engineering economist with Reynolds Company. A new $30,000 personal property asset is to be depreciated using MACRS...
The initial cost of a piece of construction equipment is $4000 000. It has useful life of 10 years. The estimated salvage value of the equipment at the end of useful life is $600 000. Calculate the depreciation charge and book value of the construction equipment using straight-line method and declining balance depreciation method in years 1, 4, 6, 9 and 10.
A large standby electricity generator in a hospital operating room has a first cost of $72,750 and may be used for a maximum of 6 years. Its salvage value, which decreases by 15% per year, is described by the equation S=72,750(1 - 0.15)", where n is the number of years after purchase. The operating cost of the generator will be constant at $6,000 per year, and the interest rate is 12% per year. Determine the economic service life and associated...
Cost 5) The pertinent information about a piece of construction equipment follows: $180,000 Estimated Useful Life 200,000 Miles Residual (Salvage) Value $20,000 Placed in service 2015/1/2 Year 1 Output= 37,000 miles Year 2 Output= 51,000 miles Compute the first two years depreciation expense using the Units-of-Output method Year 1 $__ Year 2 $__
An injection molding system has a first cost of $180,000 and an annual operating cost of $77,000 in years 1 and 2, increasing by $6,000 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 10% per year, determine the ESL and the respective AW value of the system. The ESL is year(s) and AW value...
An injection molding system has a first cost of $150,000 and an annual operating cost of $77,000 in years 1 and 2, increasing by $4,500 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 14% per year, determine the ESL and the respective AW value of the system. The ESL is _____ year(s) and AW...
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? An injection molding system has a first cost of $185,000 and an annual operating cost of $79.000 in years and increasing by $3,000 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 14% per year, determine the ESL and the respective AW value of the system The ESL is 5 year(s) and AW...