Homework Answers
initial cost = 140000
Annual operating expenses = 20000
Annual maintenance cost = 10000 in yr 1 and increasing at 10% per year
salvage value = 15000
t=12yrs
i= 10%
Calculating net cash flow in each year and then present value
| Year | investment | Annual operating cost | Annual maintenace cost | Salvage value | Net cash flow | discount factor | present value |
| 0 | -140000 | -1,40,000.00 | 1.000000 | -1,40,000.00 | |||
| 1 | -20000 | -10000 | -30,000.00 | 0.909091 | -27,272.73 | ||
| 2 | -20000 | -11,000.00 | -31,000.00 | 0.826446 | -25,619.83 | ||
| 3 | -20000 | -12,100.00 | -32,100.00 | 0.751315 | -24,117.21 | ||
| 4 | -20000 | -13,310.00 | -33,310.00 | 0.683013 | -22,751.18 | ||
| 5 | -20000 | -14,641.00 | -34,641.00 | 0.620921 | -21,509.34 | ||
| 6 | -20000 | -16,105.10 | -36,105.10 | 0.564474 | -20,380.39 | ||
| 7 | -20000 | -17,715.61 | -37,715.61 | 0.513158 | -19,354.07 | ||
| 8 | -20000 | -19,487.17 | -39,487.17 | 0.466507 | -18,421.06 | ||
| 9 | -20000 | -21,435.89 | -41,435.89 | 0.424098 | -17,572.86 | ||
| 10 | -20000 | -23,579.48 | -43,579.48 | 0.385543 | -16,801.77 | ||
| 11 | -20000 | -25,937.42 | -45,937.42 | 0.350494 | -16,100.79 | ||
| 12 | -20000 | -28,531.17 | 15000 | -33,531.17 | 0.318631 | -10,684.06 | |
| -3,80,585.28 | |||||||
| AEW= P*(A/P, 10%, 12 yrs), (A/P, 10%, 12) = 0.146763315 | AEW | -55855.96 | |||||
showing formula in excel
| Year | investment | Annual operating cost | Annual maintenace cost | Salvage value | Net cash flow | discount factor | present value |
| 0 | -140000 | =B64+C64+E64+D64 | =1/(1+0.1)^A64 | =F64*G64 | |||
| 1 | -20000 | -10000 | =B65+C65+E65+D65 | =1/(1+0.1)^A65 | =F65*G65 | ||
| 2 | -20000 | =D65*1.1 | =B66+C66+E66+D66 | =1/(1+0.1)^A66 | =F66*G66 | ||
| 3 | -20000 | =D66*1.1 | =B67+C67+E67+D67 | =1/(1+0.1)^A67 | =F67*G67 | ||
| 4 | -20000 | =D67*1.1 | =B68+C68+E68+D68 | =1/(1+0.1)^A68 | =F68*G68 | ||
| 5 | -20000 | =D68*1.1 | =B69+C69+E69+D69 | =1/(1+0.1)^A69 | =F69*G69 | ||
| 6 | -20000 | =D69*1.1 | =B70+C70+E70+D70 | =1/(1+0.1)^A70 | =F70*G70 | ||
| 7 | -20000 | =D70*1.1 | =B71+C71+E71+D71 | =1/(1+0.1)^A71 | =F71*G71 | ||
| 8 | -20000 | =D71*1.1 | =B72+C72+E72+D72 | =1/(1+0.1)^A72 | =F72*G72 | ||
| 9 | -20000 | =D72*1.1 | =B73+C73+E73+D73 | =1/(1+0.1)^A73 | =F73*G73 | ||
| 10 | -20000 | =D73*1.1 | =B74+C74+E74+D74 | =1/(1+0.1)^A74 | =F74*G74 | ||
| 11 | -20000 | =D74*1.1 | =B75+C75+E75+D75 | =1/(1+0.1)^A75 | =F75*G75 | ||
| 12 | -20000 | =D75*1.1 | 15000 | =B76+C76+E76+D76 | =1/(1+0.1)^A76 | =F76*G76 | |
| =SUM(H64:H76) | |||||||
| AEW= P*(A/P, 10%, 12 yrs), (A/P, 10%, 12) = 0.146763315 | AEW | =H77*0.146763315 | |||||
Add Answer to:
7. A tower crane has the following costs, and can be sold to a salvage yard...
Subaru of Indiana Automotive has an overhead crane that has an estimated remaining life of 10 years. The crane can be sold now for $9,000. If the crane is kept in service, it must be overhauled immediately at a cost of $5,500. Operating and maintenance co
Subaru of Indiana Automotive has an overhead crane that has an estimated remaining life of 10 years. The crane can be sold now for $9,000. If the crane is kept in service, it must be overhauled immediately at a cost of $5,500. Operating and maintenance costs will be $3,000 per year after the crane is overhauled. The overhauled crane will have zero MV at the end of the 8-year study period. A new crane will cost $20,000, will last for...
Subaru of Indiana Automotive has an overhead crane that has an estimated remaining life of 10 yea...
Subaru of Indiana Automotive has an overhead crane that has an estimated remaining life of 10 years. The crane can be sold now for $9,000. If the crane is kept in service, it must be overhauled immediately at a cost of $5,500. Operating and maintenance costs will be $3,000 per year after the crane is overhauled. The overhauled crane will have zero MV at the end of the 8-year study period. A new crane will cost $20,000, will last for...
PROBLEM NO. 4 Machine X has an initial cost of $10,000, annual maintenance of $500 per...
PROBLEM NO. 4 Machine X has an initial cost of $10,000, annual maintenance of $500 per year, and no salvage value at the end of its four-year useful life. Machine Y costs $20,000. The first year there is no maintenance cost. The second year, maintenance is $100, and increases $100 per year in subsequent years. The machine has an anticipated $5,000 salvage value at the end of its 12-year useful life. If interest is 8%, which machine should be selected?...
Please show code if you use excel thank you. Project A has a first cost of...
Please show code if you use excel thank you. Project A has a first cost of $3,500, annual operating and maintenance costs of $1,900, annual savings of $2,300, and a salvage value of $1,800 at the end of its 5 year useful life. Project B has a first cost of $6,000, annual operating and maintenance costs of $1,600, annual savings of $2,500, and a salvage value of $2,000 at the end of its 7 year useful life. Using a MARR...
answer all questions please 15. A company is considering buying a computer with the following costs...
answer all questions please
15. A company is considering buying a computer with the following costs and interest rate. initial cost $3900 salvage value $1800 useful life 10 years annual maintenance $390 interest rate 69 Most nearly, what is the equivalent uniform annual cost (EUAC) of the computer? (A) $740 (B) $780 (C) $820 (D) $850 20. An engineer is evaluating two options for distribut- ing products from a production facility: renting or own ing trucks. The effective annual interest...
1. A new pipeline is installed. Annual maintenance and pumping costs are considered to be paid in...
1. A new pipeline is installed. Annual maintenance and pumping costs are considered to be paid in their entireties at the end of the years in which their costs are incurred (assume that maintenance happens in year 10). The pipe has the following costs and properties: Initial cost $7,500 Annual interest rate 5% Service life 10 years Salvage value $500 Annual maintenance $500 Pump cost/hour $2.75 Pump operation 2000 hours/year What is the equivalent uniform annual cost (EUAC) of the pipe?
selected? urm is considering three mutually exclusive alter- atives as part of a production improvement program....
selected? urm is considering three mutually exclusive alter- atives as part of a production improvement program. The alternatives are as follows: First cost $15,000 Maintenance 1,600 and operating Annual benefit 8,000 Salvage value 3,000 Useful life, in years4 Installed cost Uniform annual benefit Useful life, in years A B C $10,000 $15,000 $20,000 1.625 1.625 1,890 10 20 For each alternative, the salvage value at the end of useful life is zero. At the end of 10 years, Alt. A...
a) determine which machine should be purchased, based on equivalent uniform annual cost. b) what would...
a) determine which machine should be purchased, based on
equivalent uniform annual cost.
b) what would be the MACRS depreciation in the third year for
machine II?
11-44 A company is considering buying a new piece of machinery. A 10% interest rate will be used in the computations. Two models of the machine are available. sloboibos trolinis ob hoi Machine | Machine II Initial cost odos $100,000 le 25,000 $80,000 od 000. End-of-useful-life 20,000 salvage value, s Annual operating 18,000...
3. Compare the two following two alternatives using an equivalent worth method and a MARR of 12%. The repeatability ass...
3. Compare the two following two alternatives using an equivalent worth method and a MARR of 12%. The repeatability assumption is acceptable. Aternative I: Initial investment of $45,000, net revenue the first year of $8,000, increasing $4,000 per year for the six year useful life. Salvage value is estimated to be $6500. Alternative II: Initial investment of $60,000, uniform annual revenue of $12,000 for the five year useful life. Slavage value is estimated to be $9,000.
1. A printing machine costs P400,000 to purchase with a life of 10 years with no...
1. A printing machine costs P400,000 to purchase with a life of 10 years with no salvage value .If the rate of interest is 10% per annum. compounded annually ,compute the equivalent uniform annual cost of the machine if it will cost P100,000 per year to operate ? 2. The first cost of an electric rebar bender is P324,000 and a salvage value of P50,000 at the end of its life for 4 years .Money is worth 6% annually .If...
Subaru of Indiana Automotive has an overhead crane that has an estimated remaining life of 10 years. The crane can be sold now for $9,000. If the crane is kept in service, it must be overhauled immediately at a cost of $5,500. Operating and maintenance costs will be $3,000 per year after the crane is overhauled. The overhauled crane will have zero MV at the end of the 8-year study period. A new crane will cost $20,000, will last for...
PROBLEM NO. 4 Machine X has an initial cost of $10,000, annual maintenance of $500 per year, and no salvage value at the end of its four-year useful life. Machine Y costs $20,000. The first year there is no maintenance cost. The second year, maintenance is $100, and increases $100 per year in subsequent years. The machine has an anticipated $5,000 salvage value at the end of its 12-year useful life. If interest is 8%, which machine should be selected?...
answer all questions please
15. A company is considering buying a computer with the following costs and interest rate. initial cost $3900 salvage value $1800 useful life 10 years annual maintenance $390 interest rate 69 Most nearly, what is the equivalent uniform annual cost (EUAC) of the computer? (A) $740 (B) $780 (C) $820 (D) $850 20. An engineer is evaluating two options for distribut- ing products from a production facility: renting or own ing trucks. The effective annual interest...
selected? urm is considering three mutually exclusive alter- atives as part of a production improvement program. The alternatives are as follows: First cost $15,000 Maintenance 1,600 and operating Annual benefit 8,000 Salvage value 3,000 Useful life, in years4 Installed cost Uniform annual benefit Useful life, in years A B C $10,000 $15,000 $20,000 1.625 1.625 1,890 10 20 For each alternative, the salvage value at the end of useful life is zero. At the end of 10 years, Alt. A...
a) determine which machine should be purchased, based on
equivalent uniform annual cost.
b) what would be the MACRS depreciation in the third year for
machine II?
11-44 A company is considering buying a new piece of machinery. A 10% interest rate will be used in the computations. Two models of the machine are available. sloboibos trolinis ob hoi Machine | Machine II Initial cost odos $100,000 le 25,000 $80,000 od 000. End-of-useful-life 20,000 salvage value, s Annual operating 18,000...
3. Compare the two following two alternatives using an equivalent worth method and a MARR of 12%. The repeatability assumption is acceptable. Aternative I: Initial investment of $45,000, net revenue the first year of $8,000, increasing $4,000 per year for the six year useful life. Salvage value is estimated to be $6500. Alternative II: Initial investment of $60,000, uniform annual revenue of $12,000 for the five year useful life. Slavage value is estimated to be $9,000.
Most questions answered within 3 hours.
-
A hot-air balloon is descending with a velocity of (−2.00m/s)y^.
A champagne bottle is opened to...
asked 19 seconds from now -
1. When a nearsighted person looks at an object that is in the
distance with their...
asked 1 hour ago -
QUESTION 8
Both of these statements will store the same value in the
variable $number
$number...
asked 1 hour ago -
The price of 1 lb of potatoes is $1.75. If all the potatoes sold
today at...
asked 2 hours ago -
Garcia Company issues 20.00%, 15-year bonds with a par value of
$470,000 and semiannual interest payments....
asked 2 hours ago -
In C++ Programming, Try using loops only.
This lab demonstrates the use of the While Loop...
asked 3 hours ago -
Effect of DCMU and sodium azide on Chlamydomonas? We did an
experiment where we had Chlamydomonas...
asked 4 hours ago -
1a) According to the ideal gas law, _______________.
a. a gas has infinite volume at absolute...
asked 5 hours ago -
Oakdale Fashions, Inc. had $245,000 in 2018 taxable income.
Using the tax schedule in Table 2.3...
asked 5 hours ago -
The marketing class at CSUS had an average score of 150. An
educational analyst determined that...
asked 7 hours ago -
Justin Case has purchased a $250 000 home by putting 20 % down
and taking out...
asked 7 hours ago -
1. In a labor market, marginal cost for a firm is
____________.
a. recruiting cost
b....
asked 8 hours ago