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4. A city is trying to decide on the purchase of a garbage truck. Two types...
Please answer question 3. 2. A city has learned that by buying larger garbage trucks, it could reduce labor costs for garbage removal. Note: All the dollar amounts below are in this year’s dollars (constant dollars). a. Cost of the trucks today is $400,000. b. Annual savings in this year’s constant dollars is $90,000. c. Trucks will last for 4 years and then will be sold for $100,000. d. The city can borrow money at a 7% discount rate to...
14. [6 marks] You are trying to decide between manufacturing a part using a standard milling machine or a CNC machine. The Standard Mill option will cost $5,000 in capital, have an annual operating cost of $2,000, and annual benefits of $4,000. The CNC Mill will cost $16,000 in capital, but have an annual operating cost of only $750 and an annual benefit of $4,000. Your interest rate is 12% per year. The Standard Mill has a useful life of...
c. 17.5 marks] The city council is considering the purchase of a new fire truck. The capital investment is $50,000 and the maintenance expenses per year are $6,000. The fire truck has a life of six years and by using this truck there will be an annual reduction in fire damage of $20,000. If the MARR is 12% per year, what is the modified B-C ratio for this truck using the annual worth method? i. 1.15 ii. 0.87 iii. 1.64...
c. [7.5 marks] The city council is considering the purchase of a new fire truck. The capital investment is $50,000 and the maintenance expenses per year are $6,000. The fire truck has a life of six years and by using this truck there will be an annual reduction in fire damage of $20,000. If the MARR is 12% per year, what is the modified B-C ratio for this truck using the annual worth method? i. 1.15 ii. 0.87 iii. 1.64...
Help with below calculation Jimbob Co. is considering two alternatives to replace a delivery truck. The following data have been gathered concerning these two alternatives: Purchase cost new Major repairs end of year 2 Annual cash operating costs Salvage value at the end of 3 years Truck A $ 50,000 $ 10,000 $ 20,000 $ 15,000 Truck B $ 70,000 8 ,000 $ 18,000 $ 20,000 Jimbob Co. uses a 10% discount rate and the incremental cost approach to capital...
QUESTION 12 ADNOC is a leasing power from DEWA. The company is trying to decide whether to purchase or lease for one of its sites. ADNOC can either buy 10 t generator from ABB or of each year The estimated costs are the following Options Purchase GeneratorLease (or Rent Initial payment Annual rent $320,000 $40,000/ year Annual running costs $8,500/year $80,000 Life, years Which option should ADNOC choose for its power supply problem, buy the generator from ABB or lease...
Walt Wallace Construction is considering to purchase one of two alternative dump truck models (see the following table) each with a 7 year life. If interest is at 8%, use a present worth analysis to decide which truck should the company should buy. Auga Aanline D 19 20 $75.000 10.NO $100 I DEO 12pt Paragraph --- O Words
Question 4: [10pts each] The city of Toronto is considering two types of green water filtration subsystems. Design A requires an initial investment of $500,000, with annual operating and maintenance costs of 10% of the investment for the next 15 years. Design B needs an investment of $250,000, with annual operating and maintenance costs of $75,000 per year for the next 15 years. Tax collections from Torontonians would be $85,000 per year. The interest rate is 6%, and no salvage...
3) A company that manufactures amplified pressure transducers is trying to decide between the machines shown below. Compare them on the basis of their present worth values, using an interest rate of 18% peryear. Show the present worth calculation for each alternative and clearly state which alternative should be selected based on the present worth analysis and why. (50 points) Variable Dual Speed Speed 250,000-224,000 First cost,S Annual operating cost, S/year-231,000-235,000 Overhaul in year 3, S Overhaul in year 4,...
QUESTION 2 Al Dabar Sewage Company is trying to decide among two alternatives of waste de-watering processes. The costs associated with these alternatives are shown below if the MARR is 10% per year, Calculate Present Worth Analysis using LCM method. (See table below) Alternative Installed costs Annual operating costs $6000 $4000 S68,500 $48,500 $33,250 $28,250 Salvage value Useful life, years Required 1) The PW value for X 2) The PW value for Y 3) The Selected Option Note: Answer with...