Homework Answers
Since both the alternatives
are cost dominated, the negative sign is ignored and salvage value
is deducted as a cash inflow.
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Your client requests you to evaluate two different pump systems for a facility. Asuume an interest...
Your client requests you to evaluate two different pump systems for a facility. Asuume an interest...
Your client requests you to evaluate two different pump systems for a facility. Asuume an interest rate of 9% per year and each system has a life span of 15 years. System 1: Initial cost = $55,000 O&M cost = $2500 for the first year and increasing $100 per year for the remainder of the life span Salvage Value = $15,000 System 2: Initial cost = $50,000 O&M cost = $2000 for the first year and increasing $150 per year...
A company must choose between two products and use an 8-year period to make a decision...
A company must choose between two products and use an 8-year period to make a decision with an effective interest rate per quarter of 3.2% Product 1 has a first cost of $2500, $3000 yearly operating cost, has a life of 8 years and salvage of $2000 Product 2 has a first cost of $9000, annual operating cost of $2000, has a life of 12 years and salvage of $6000 What is the effective interest rate per year? What is...
can you solve it by using Excel Alternative Comparison-Different Lives 5.17 Dexcon Technologies, Inc. is...
can you solve it by using Excel
Alternative Comparison-Different Lives 5.17 Dexcon Technologies, Inc. is evaluating two alter- natives to produce its new plastic filament with tribological (i.e., low friction) properties for creat- ing custom bearings for 3-D printers. The esti- mates associated with each alternative are shown below. Using a MARR of 20 % per year, which al- ternative has the lower present worth? LS DDM Method -370,000 -164,000 First cost, $ -21,000 -55,000 M&O cost, $/year 30,000...
You are considering two different systems for pollution control. System 1 costs $960,000 has an eight...
You are considering two different systems for pollution control. System 1 costs $960,000 has an eight year life, and has a pre-tax operating cost of $7,150 per year. System Two costs $580,000, has a five year life and has a pre-tax operating cost of $35,000 per year. Fort both systems use straight line depreciation and assume neither system has any salvage value. If your tax rate is 39% and your discount rate is 13%, which do you prefer?
Solve it in spreadsheet money, anu Juuay pu mom. Alternative Comparison-Different Lives 5.17 Dexcon Technologies, Inc....
Solve it in spreadsheet
money, anu Juuay pu mom. Alternative Comparison-Different Lives 5.17 Dexcon Technologies, Inc. is evaluating two alter- natives to produce its new plastic filament with tribological (i.e., low friction) properties for creat- ing custom bearings for 3-D printers. The esti- mates associated with each alternative are shown below. Using a MARR of 20% per year, which al- ternative has the lower present worth? Method First cost, $ M&O cost, $/year Salvage value, $ Life, years DDM -...
Two methods can be used to produce expansion anchors. Method A costs $90,000 initially and will...
Two methods can be used to produce expansion anchors. Method A costs $90,000 initially and will have a $16,000 salvage value after 3 years. The operating cost with this method will be $26,000 in year 1, increasing by $3200 each year. Method B will have a first cost of $106,000, an operating cost of $6000 in year 1, increasing by $6000 each year, and a $36,000 salvage value after its 3-year life. At an interest rate of 14% per year,...
QUESTION 4: Exide Technologies think the operation system for their machine tools is too old...
QUESTION 4: Exide Technologies think the operation system for their machine tools is too old and too slow, but it can still be used for 5 years with an update. Exide Technologies is considering build a new operation system to replace the old one. A summary of the financial information of build a new one and use the old one: Challenger: Build a New Operation System: Time Investment Salvage Salvage decrease O&M O&M Cost increase Cash Flow $80,000 $70,500...
show your work 10) An oil company is planning to install a new pipeline to connect storage tanks to a processing pla...
show your work
10) An oil company is planning to install a new pipeline to connect storage tanks to a processing plant 1500 m away. A 120 mm pipe is being considered with the following characteristics. What is the benefit-cost ratio for this pipe using an annual interest rate of 10%? Initial cost $2500 Service Life 12 Years Salvage Value $300 Annual Maintenance $300 Pump Cost/Hour $1.40 Pump Operation 600 hours/year Estimated Benefits $2000/year a. 1.22 b. 1.34 c. 1.45...
Two machines are under consideration and only one can be bought. MARR is 10%. Use the...
Two machines are under consideration and only one can be bought. MARR is 10%. Use the following information and find out which option should be purchased. Use an annual worth comparison. Initial cost Annual savings Annual maintenance cost Life Salvage value Machine A $280,000 $40,000 $2000 for year 1, increasing by 5% each year thereafter 15 years $19,250 Machine B $185,000 $32,000 $1000 for year 1, increasing by $350 each year thereafter 10 years $14,800 3(a) Advertisements suggest that a...
engineering economics A public utility district (PUD) has retained your services to provide a perpetual water...
engineering economics
A public utility district (PUD) has retained your services to provide a perpetual water service to a small resort community: Option 1 Option 2 $150,000 $235,000 45 Pipe First Cost Expected Life, years Salvage Value (S) Pump First Cost Expected Life, years 15,000 23,500 100,000 125,000 15 10,000 1,000 Pump House First Cost Expected Life, years 15,000 20,000 50 50 0 Energy (Annual) Costs First Year Gradient 50,000 1,000 increasing 20,000 1,000 decreasing 15,000 600 5,000 200 System...
A company must choose between two products and use an 8-year period to make a decision with an effective interest rate per quarter of 3.2% Product 1 has a first cost of $2500, $3000 yearly operating cost, has a life of 8 years and salvage of $2000 Product 2 has a first cost of $9000, annual operating cost of $2000, has a life of 12 years and salvage of $6000 What is the effective interest rate per year? What is...
can you solve it by using Excel
Alternative Comparison-Different Lives 5.17 Dexcon Technologies, Inc. is evaluating two alter- natives to produce its new plastic filament with tribological (i.e., low friction) properties for creat- ing custom bearings for 3-D printers. The esti- mates associated with each alternative are shown below. Using a MARR of 20 % per year, which al- ternative has the lower present worth? LS DDM Method -370,000 -164,000 First cost, $ -21,000 -55,000 M&O cost, $/year 30,000...
Solve it in spreadsheet
money, anu Juuay pu mom. Alternative Comparison-Different Lives 5.17 Dexcon Technologies, Inc. is evaluating two alter- natives to produce its new plastic filament with tribological (i.e., low friction) properties for creat- ing custom bearings for 3-D printers. The esti- mates associated with each alternative are shown below. Using a MARR of 20% per year, which al- ternative has the lower present worth? Method First cost, $ M&O cost, $/year Salvage value, $ Life, years DDM -...
Two methods can be used to produce expansion anchors. Method A costs $90,000 initially and will have a $16,000 salvage value after 3 years. The operating cost with this method will be $26,000 in year 1, increasing by $3200 each year. Method B will have a first cost of $106,000, an operating cost of $6000 in year 1, increasing by $6000 each year, and a $36,000 salvage value after its 3-year life. At an interest rate of 14% per year,...
QUESTION 4: Exide Technologies think the operation system for their machine tools is too old and too slow, but it can still be used for 5 years with an update. Exide Technologies is considering build a new operation system to replace the old one. A summary of the financial information of build a new one and use the old one: Challenger: Build a New Operation System: Time Investment Salvage Salvage decrease O&M O&M Cost increase Cash Flow $80,000 $70,500...
show your work
10) An oil company is planning to install a new pipeline to connect storage tanks to a processing plant 1500 m away. A 120 mm pipe is being considered with the following characteristics. What is the benefit-cost ratio for this pipe using an annual interest rate of 10%? Initial cost $2500 Service Life 12 Years Salvage Value $300 Annual Maintenance $300 Pump Cost/Hour $1.40 Pump Operation 600 hours/year Estimated Benefits $2000/year a. 1.22 b. 1.34 c. 1.45...
Two machines are under consideration and only one can be bought. MARR is 10%. Use the following information and find out which option should be purchased. Use an annual worth comparison. Initial cost Annual savings Annual maintenance cost Life Salvage value Machine A $280,000 $40,000 $2000 for year 1, increasing by 5% each year thereafter 15 years $19,250 Machine B $185,000 $32,000 $1000 for year 1, increasing by $350 each year thereafter 10 years $14,800 3(a) Advertisements suggest that a...
engineering economics
A public utility district (PUD) has retained your services to provide a perpetual water service to a small resort community: Option 1 Option 2 $150,000 $235,000 45 Pipe First Cost Expected Life, years Salvage Value (S) Pump First Cost Expected Life, years 15,000 23,500 100,000 125,000 15 10,000 1,000 Pump House First Cost Expected Life, years 15,000 20,000 50 50 0 Energy (Annual) Costs First Year Gradient 50,000 1,000 increasing 20,000 1,000 decreasing 15,000 600 5,000 200 System...
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