5. A machine can be repaired today for $2,000. If repairs are not made, the operating...
5. A machine can be repaired today for $2,000. If repairs are not made, the operating expenses will increase by $200 each year for the next 5 years. Assume that the expenses will occur at the end of each year and that the machine will have no value under either alternative at the end if the 5-year period. The minimum acceptable rate of return is12%. Compare the present worth of the two alternatives
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5. A machine can be repaired today for $2,000. If repairs are
not made, the operating...
Problem 05.023 Alternative Comparison - Different Lives Compare the alternatives C and D on the basis...
Problem 05.023 Alternative Comparison - Different Lives Compare the alternatives C and D on the basis of a present worth analysis using an interest rate of 10% per year and a study period of 10 years. $ 40,000 $-6,000 D $-22.000 $-3,000 Alternative First Cost AOC, per Year Annual Increase in Operating Cost, per Year Salvage Value Life, Years $-200 $-300 $7,000 10 $200 5 The present worth of alternative C is $ and that of alternative D is $...
office in Ontario is considering buying a 3-D printing machine. The office is choosing hetween two...
office in Ontario is considering buying a 3-D printing machine. The office is choosing hetween two 3-D printing inachines that use Fused Deposition Modeling (FDM) technology. The office has a MARR (Minimum Acceptable Rate of Return) of 7%. The salvage value for both machines at the end of their service lives is expected to he $400. Use the information in the table below to answer the following questions Price Running cost per year Maintenance cost Machine A S6,400 $1,200 $600...
SITUATION: Two alternatives for a margarita mixer are under consideration. One system, the Mixer-Plus has an...
SITUATION: Two alternatives for a margarita mixer are under consideration. One system, the Mixer-Plus has an initial cost of $6,000. The salvage value after 7 years is expected to be $200. The operating costs including operator wages, routine maintenance, overhauls, etc., is expected to be $2,000 per year. It is expected that this machine will encourage the purchase of an additional 50 drinks per week costing $2.00 apiece to produce and for which $6.00 can be charged. Alternatively, a completely...
SITUATION: Two alternatives for a margarita mixer are under consideration. One system, the Mixer-Plus has an...
SITUATION: Two alternatives for a margarita mixer are under consideration. One system, the Mixer-Plus has an initial cost of $6,000. The salvage value after 7 years is expected to be $200. The operating costs including operator wages, routine maintenance, overhauls, etc., is expected to be $2,000 per year. It is expected that this machine will encourage the purchase of an additional 50 drinks per week costing $2.00 apiece to produce and for which $6.00 can be charged. Alternatively, a completely...
Perform a present worth (PW)-based evaluation of the two alternatives below using a spreadsheet. The after-tax...
Perform a present worth (PW)-based evaluation of the two alternatives below using a spreadsheet. The after-tax minimum acceptable rate of return (MARR) is 8% per year, Modified Accelerated Cost Recovery System (MACRS) depreciation applies, and Te = 40%. The (GI-OE) estimate is made for the first 3 years; it is zero in year 4 when each asset is sold. Alternative X Y First Cost, $ -8,000 -13,000 Salvage Value, Year 4, $ 0 2,000 GI-OE, $ per Year 3,500 5,000...
A company is considering two investment alternatives. Alternative A is a new machine that costs $50,000...
A company is considering two investment alternatives. Alternative A is a new machine that costs $50,000 and will last for ten years with no salvage value. It will save the company $5479 per year and the savings will increase by $2050 each year. Alternative B is a is a machine that will cost $75,000 and last 10 years. The salvage value at the end of 10 years is $25,000. It will save $11352 per year. Find the present worth of...
Problem 05.023 Alternative Comparison - Different Lives Compare the alternatives C and D on the basis...
Problem 05.023 Alternative Comparison - Different Lives Compare the alternatives C and D on the basis of a present worth analysis using an interest rate of 12% per year and a study period of 10 years. с $-44,000 $-12,000 $-34,000 $-7,000 Alternative First Cost AOC, per Year Annual Increase in Operating Cost, per Year Salvage Value Life, Years $-1,500 $-1,200 $5,000 10 $1,200 5 The present worth of alternative C is $ -134497.32 and that of alternative D is $...
12. (5 pts) A company is considering replacing a machine that was bought six years ago for $50,000. The machine, however, can be repaired and its life ext five $44,000 and will reduce the operatin...
12. (5 pts) A company is considering replacing a machine that was bought six years ago for $50,000. The machine, however, can be repaired and its life ext five $44,000 and will reduce the operating expenses by $6,000 per year. The seller of the new machine has offered a trade-in allowance of $15,000 for the old machine. If MARR is 12% per year before taxes, how much can the company spend to repair the existing machine? Choose the closest answer....
Two hammer mills are under consideration for installation in a gypsum mill. Machine A has a first cost of $18,000, n...
Two hammer mills are under consideration for installation in a gypsum mill. Machine A has a first cost of $18,000, no salvage value at the end of its 6 year life and annual operating costs of $10,000. Machine B costs $32,000 and has a salvage value of $8000 at the end of its 9 year life. Operating costs for Machine B are $8000 per year. Using the common multiple method, compare the two alternatives on the basis of their present...
5. The data for new and used machines are shown below: Initial cost($) Annual operating cost...
5. The data for new and used machines are shown below: Initial cost($) Annual operating cost ($/year) Salvage value (5) Life (years) Used machine 15,000 8,000 5,000 New machine 40,000 2,000 10,000 Use an interest rate of 7% per year. a) Find the present worth of the new machine b) Compare the PW of the used machine to the new c) If each machine were to be funded using an annual payment load at 8%, how much would the annual...
Problem 05.023 Alternative Comparison - Different Lives Compare the alternatives C and D on the basis of a present worth analysis using an interest rate of 10% per year and a study period of 10 years. $ 40,000 $-6,000 D $-22.000 $-3,000 Alternative First Cost AOC, per Year Annual Increase in Operating Cost, per Year Salvage Value Life, Years $-200 $-300 $7,000 10 $200 5 The present worth of alternative C is $ and that of alternative D is $...
office in Ontario is considering buying a 3-D printing machine. The office is choosing hetween two 3-D printing inachines that use Fused Deposition Modeling (FDM) technology. The office has a MARR (Minimum Acceptable Rate of Return) of 7%. The salvage value for both machines at the end of their service lives is expected to he $400. Use the information in the table below to answer the following questions Price Running cost per year Maintenance cost Machine A S6,400 $1,200 $600...
SITUATION: Two alternatives for a margarita mixer are under consideration. One system, the Mixer-Plus has an initial cost of $6,000. The salvage value after 7 years is expected to be $200. The operating costs including operator wages, routine maintenance, overhauls, etc., is expected to be $2,000 per year. It is expected that this machine will encourage the purchase of an additional 50 drinks per week costing $2.00 apiece to produce and for which $6.00 can be charged. Alternatively, a completely...
SITUATION: Two alternatives for a margarita mixer are under consideration. One system, the Mixer-Plus has an initial cost of $6,000. The salvage value after 7 years is expected to be $200. The operating costs including operator wages, routine maintenance, overhauls, etc., is expected to be $2,000 per year. It is expected that this machine will encourage the purchase of an additional 50 drinks per week costing $2.00 apiece to produce and for which $6.00 can be charged. Alternatively, a completely...
Problem 05.023 Alternative Comparison - Different Lives Compare the alternatives C and D on the basis of a present worth analysis using an interest rate of 12% per year and a study period of 10 years. с $-44,000 $-12,000 $-34,000 $-7,000 Alternative First Cost AOC, per Year Annual Increase in Operating Cost, per Year Salvage Value Life, Years $-1,500 $-1,200 $5,000 10 $1,200 5 The present worth of alternative C is $ -134497.32 and that of alternative D is $...
12. (5 pts) A company is considering replacing a machine that was bought six years ago for $50,000. The machine, however, can be repaired and its life ext five $44,000 and will reduce the operating expenses by $6,000 per year. The seller of the new machine has offered a trade-in allowance of $15,000 for the old machine. If MARR is 12% per year before taxes, how much can the company spend to repair the existing machine? Choose the closest answer....
Two hammer mills are under consideration for installation in a gypsum mill. Machine A has a first cost of $18,000, no salvage value at the end of its 6 year life and annual operating costs of $10,000. Machine B costs $32,000 and has a salvage value of $8000 at the end of its 9 year life. Operating costs for Machine B are $8000 per year. Using the common multiple method, compare the two alternatives on the basis of their present...
5. The data for new and used machines are shown below: Initial cost($) Annual operating cost ($/year) Salvage value (5) Life (years) Used machine 15,000 8,000 5,000 New machine 40,000 2,000 10,000 Use an interest rate of 7% per year. a) Find the present worth of the new machine b) Compare the PW of the used machine to the new c) If each machine were to be funded using an annual payment load at 8%, how much would the annual...
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