Question

The machines shown below are under consideration for an improvements to an automated candy bar wrapping process. Machine Machine -SOTO - 65 10 - tom USD First cost, & Annual cost, t/year Salvage value, lofe years beat the @ Based on the data provided and wing an interest rate of sto per year, the correction to calculate the capital Recovery "CR" of Machine is -) CRC = 56, tv (P/A, 8%, 5) + 19, TN, 8%) b) CRC = -50, IAP,8%,3)+ 19, ALF, 86,3)- 9 m (AIP, $1,3) CRC = - St, to (AIP, 8%) + 18 / AFP, 86,5) -9000 d) Cres - 511oo (AIP, <% 3% + 12, ID (AIF, 8%, 5) (2) Based on the data provided and wring an interest rate of 8% per year, to Capital Recovery "CR" of Machine c is closest too (a) CRC = -80 15,705 b) CRC 8623,098 (c) Chc= 149, noe (d) CRC = - $ 10,882 6 Based on the data provided and wring an interest rate of sto per year, the Correction equation to calculate the Annual worth "AW" of Machine C is: a) AW. - - 50 OTOP/A, 8%, 5) + 19, 10 (F/A, 8% )-9,110 6) AWC = -50,000 (Alp, 8%, 3) + 22,000 (A/F, 8%, 3)- 9,000 (A/P, 843) c) AWC = -56, DAH, 8% 3) + 19,6 (A/F, 8%, 3)- 9 OVD U AW = -50,170 (A/P 8% 3) + 85, DD (A/F, 8%, 3) - ID, ITO 4 Based on the data provided and wring an interest rate of 86 per year, the Annual Worth AW" of Machine C is closest to a) AUC = -$25,88% 3) AWE - $24, 705 ? Alle = -819, wor I AWe = -8 28, 408

Answer 1

1) Capital recovery is the sum of initial amount as annuity as well as salvage value as annuity
Capital recovery for machine C is
(d) CRC = -50000(A/P,8%,3) + 12000 (A/F,8%,3)

2) (a) So, CRC = -50000(A/P,8%,3) + 12000 (A/F,8%,3)
              = -50000(.3880) + 12000 (.3080) = $-15704
hence, the capital recovery for machine C is $-15704

3) the annual running cost is added to the capital recovery in order to get the required annual worth
c) The required annual worth of machine C is
AWC = -50000(A/P,8%,3) + 12000 (A/F,8%,3) -9000

4) b) so, AWC = -50000(A/P,8%,3) + 12000 (A/F,8%,3) -9000
               = -50000(.3880) + 12000 (.3080) -9000 = $-24704