Answer : correct answer is option 4. ( Higher than $42000)
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Recalibration of a machine costs $5,000 per year. If the machine will be recalibrated for each...
Problem 1 Part (a) Recalibration of sensitive measuring devices costs $8000 per year. If the machine will be recalibrated for each of 6 years starting 3 years after purchase, for interest at 16% per year, calculate the 8-year equivalentin in : Present= $ Selected Answer: 29477 Correct Answer: 21,907.75 Answer range +/-5 (21902.75 -21912.75)
Spike Inc is considering the purchase of a new machine for the production of computers. Machine A costs $3,400,000 and will last for 6 years. Variable costs are 20% of sales and fixed costs are $850,000 per year. Machine B costs $5,600,000 and will last for 10 years. Variable costs for the machine are 15% of sales and fixed costs are $1,000,000 per year. The sales for each machine will be $5,000,000 per year. The required rate of return is 8%,...
Your firm needs a machine which costs $270,000, and requires $42,000 in maintenance for each year of its 3 year life. After 3 years, this machine will be replaced. The machine falls into the MACRS 3-year class life category. Assume a tax rate of 21% and a discount rate of 16%. If this machine can be sold for $27,000 at the end of year 3, what is the after tax salvage value? Multiple Choice $15,806 $25,531.47 $6,993.00 $21,330.00
co. is now considering which of two product labeling machine to buy. Machine A costs $5,000 to buy and $300 per year to operate. It wears out and must be replaced every two years. Machine B costs $6,500 to buy and $200 per year to operate. It lasts for four years. Ignoring taxes, which one should it choose, if it use a 10% discount rate? i. Compute PV cost of each machine. ii. Compute equivalent annual cost for each machine,...
A machine which initially costs $14,000 has operating costs of $800 per year. These operating costs include routine maintenance, but additional major overhauls costing $1,600 each are anticipated in years 2, 4, and 6. The machine is sold for its salvage value of $2,400 at the end of year 7. The machine's owners use an interest rate of 8% for their financial analysis. a) Draw the cash flow diagram for this scenario. b) What is the net present value of...
2.4 Twenty-First Century manufacturers are planning to acquire a new machine that will cost $5,000. The machine's estimates life is 10-years. The machine is expected to be trouble free during the first year of operation. The maintenance costs for the subsequent four years of operation are estimated at $100, $200, $300, and $400 respectively. The machine will require an overhaul halfway through its life at a cost of $2,000. The maintenance costs following the mid-life overhaul are estimated at $200...
Songo currently uses a manufacturing machine that costs $6,500 per year to operate. The machine originally cost $12,000 and had a 10 year useful life. The machine is currently 7 years old, after the remaining 3 years, the machine will be disposed of for $5,000. They have the option of purchasing a new machine for $15,000, which also has a useful life of 10 years, but it only costs $2,000 to operate per year. If Songo were to scrap the...
X Company is unhappy with a machine that they bought just a year ago for $40,000. It is considering replacing it with a new machine that will save significant operating costs. Operating costs with the current machine are $64,000 per year; operating costs with the new machine are expected to be $42,000 per year. Both machines will last for 6 more years.The current machine can be sold immediately for $4,000 but will have no salvage value at the end of...
A company is going to invest in a new machine with a capital cost of $250,000. The life of the machine will be 7 years with no salvage value. The machine can produce up to 100,000 parts each of which will make a profit of $2. The operating costs are $25,000 per year. Assuming a MARR of 10%, what is the minimum production level the machine must achieve to be profitable? between 39,000 and 42,000 greater than 42,000 less than...
Draw diagram clearly and answer completely for rating $5,000 inflow at time zero, $1000 per year outflow in years 1 and 2 at an interest rate of 10% per year, and an unknown future amount in year 2 1) Identify all engineering economy symbols involved and construct a cash flow diagram 2) Calculate the equivalent future amount of cash at end of year 2