Homework Answers
Answer- is the amount of time an asset should be used such that it has the smallest annual cost of operation
reason- Economic service life of a project means it is the duration in which the Remaining life of an asset results in minimum annual equivalent cost.
It is used at the time of replacement
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What is the economic service life of a project? It is the same as the cost...
What is the economic service life of a project? Question 16 options: It is the present...
What is the economic service life of a project? Question 16 options: It is the present worth of the project after tax considerations have been deducted. It is the same as the cost basis of the project. It is the amount of time an asset should be used such that it has the smallest annual cost of operation. It is the amount of time an asset can operate before it becomes obsolete or fails.
Economic service life is the entire useful life of an asset that results in the minimum...
Economic service life is the entire useful life of an asset that results in the minimum annual equivalent cost. a. True b. False
Everything is the same except that Machine A’s cost is $500,000, annual operating cost of $50,000,...
Everything is the same except that Machine A’s cost is
$500,000, annual operating cost of $50,000, economic life of five
years. Machine B’s cost is $600,000, annual expense of $3,000,
economic life of 8 years. The time value of money is 8%
Show your work
13-4 Two mutually exclusive machines are under consideration. Man cost of $400,000, an annual operating expense of $10,000, and an of four years. Machine B has a cost of $700,000, an annual Ope of $6,000,...
compare after 12 years ENGR 1110 Comparing Economic Alternatives Two machines are being considered for the same task...
compare after 12 years
ENGR 1110 Comparing Economic Alternatives Two machines are being considered for the same task. Machine A costs $18,000 new and is estimated to last 6 years. The cost to replace machine A after 6 years will be $23,000. Machine A will cost $1,200 per year to operate/maintain and it will have a trade-in (salvage) value of $1,500. Machine B costs $38,000 to buy, will last 12 years and will have a trade in value of $2,000....
ENGR 1110 Comparing Economic Alternatives Two machines are being considered for the same task. Machine A costs $18,...
ENGR 1110 Comparing Economic Alternatives Two machines are being considered for the same task. Machine A costs $18,000 new and is estimated to last 6 years. The cost to replace machine A after 6 years will be $23,000. Machine A will cost $1,200 per year to operate/maintain and it will have a trade-in (salvage) value of $1,500. Machine B costs $38,000 to buy, will last 12 years and will have a trade in value of $2,000. The cost of operation...
Economic Life The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost...
Economic Life The Scampini Supplies Company recently purchased a new delivery truck. The new truck cost $22,500, and it is expected to generate net after-tax operating cash flows, including depreciation, of $6,250 per year. The truck has a 5-year expected life. The expected salvage values after tax adjustments for the truck are given below. The company's cost of capital is 11 percent. Year Annual Operating Cash Flow Salvage Value 0 -$22,500 $22,500 1 6,250 17,500 2 6,250 14,000 3 6,250...
A service cost project of a computer-controlled rolling mill is expected to have an annual operating...
A service cost project of a computer-controlled rolling mill is expected to have an annual operating cost of $75,000 per year. Its economic life is estimated to be years with a $10,000 salvage value. At an interest rate of 18 per year, the AW of the project is $169,500, what is the expected installation cost of the project? (Hound to One Decimal) Answer..
Etonic Inc. is considering an investment of $365,000 in an asset with an economic life of...
Etonic Inc. is considering an investment of $365,000 in an asset with an economic life of five years. The firm estimates that the nominal annual cash revenues and expenses at the end of the first year will be $245,000 and $70,000 respectively. Both revenues and expenses will grow thereafter at the annual rate of 3 percent. Etonic will use the straight-line method to depreciate its asset to zero over five years. The salvage value of the asset is estimated to...
Assume Corbins ,Inc purchased an automated machine 5 years ago that had an estimated economic life of 10 years. The Automated Machines originally cost $300,000 and has been fully depreciated, leaving...
Assume Corbins ,Inc purchased an automated machine 5 years ago that had an estimated economic life of 10 years. The Automated Machines originally cost $300,000 and has been fully depreciated, leaving a current book value of $0. The actual market value of this drill press is $80,000. The company is considering replacing the automated machine with a new one costing $380,000. Shipping and installation charges will add an additional $10,000 to the cost. Corbins., Inc also has paid a sunk...
ABC Corporation purchases a piece of equipment at a cost of $50,000. Its service life is...
ABC Corporation purchases a piece of equipment at a cost of $50,000. Its service life is 5 years (assuming its salvage value is zero at the end of the service life) and the annual operation & maintenance cost is estimated to be $1,0000 (assuming this cost occurs at the end of each year). The manager of the company is thinking of hiring it out so that he has to estimate the minimum (i.e., at breakeven condition) hire rate on a...
Everything is the same except that Machine A’s cost is
$500,000, annual operating cost of $50,000, economic life of five
years. Machine B’s cost is $600,000, annual expense of $3,000,
economic life of 8 years. The time value of money is 8%
Show your work
13-4 Two mutually exclusive machines are under consideration. Man cost of $400,000, an annual operating expense of $10,000, and an of four years. Machine B has a cost of $700,000, an annual Ope of $6,000,...
compare after 12 years
ENGR 1110 Comparing Economic Alternatives Two machines are being considered for the same task. Machine A costs $18,000 new and is estimated to last 6 years. The cost to replace machine A after 6 years will be $23,000. Machine A will cost $1,200 per year to operate/maintain and it will have a trade-in (salvage) value of $1,500. Machine B costs $38,000 to buy, will last 12 years and will have a trade in value of $2,000....
ENGR 1110 Comparing Economic Alternatives Two machines are being considered for the same task. Machine A costs $18,000 new and is estimated to last 6 years. The cost to replace machine A after 6 years will be $23,000. Machine A will cost $1,200 per year to operate/maintain and it will have a trade-in (salvage) value of $1,500. Machine B costs $38,000 to buy, will last 12 years and will have a trade in value of $2,000. The cost of operation...
A service cost project of a computer-controlled rolling mill is expected to have an annual operating cost of $75,000 per year. Its economic life is estimated to be years with a $10,000 salvage value. At an interest rate of 18 per year, the AW of the project is $169,500, what is the expected installation cost of the project? (Hound to One Decimal) Answer..
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