1. A construction company has an option to purchase a certain bulldozer for $61,000 at any time between now and 4 years from now. If the company plans to purchase the dozer 4 years from now, the equivalent present amount that the company is paying for the dozer at 6% per year interest is closest to (a) $41,230 (b) $46,710 (c) $48,320 (d) Over $49,000
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- The owner shop is contemlating adding anew product which will require additional mouthly payment of 6000, variable costs would be brirr. 2 per new product & its selling price is brirr. 7 each How many uint must be sold to realize profit of brirr 4000?For these two AW relations, the breakeven point QBE in miles per year is closest to:AW1=-23,000(A/P,10%,10) + 4000(A/F,10%, 10) - 5000 - 4QBEAW2 =-8000(A/P,10%,4) - 2000 - 6QBEa. 1984b. 1224c. 1090d. 655A new alloy can be produced by Process A, which costs $200,000 to implement. The operating cost will be $10,000 per quarter with a salvage value of $25,000 after its 2-year life. Process B will have a first cost of $250,000, an operating cost of $15,000 per quarter, and a $40,000 salvage value after its 4-year life. The interest rate is 8% per year compounded quarterly. Using present value analysis which process should be selected.
- Seawater contains 2.1 pounds of magnesium per ton. By using the processingmethod A, 85% of the metal can be recovered at a cost of 3.25 per ton of water pumped andprocessed. If process B is used, 70% of the available metal is recovered, at a cost of only 2.60per ton of water pumped and processed. The two processes are substantially equal as toinvestment costs and time requirements. (a) If the extracted metal can be sold for 2.40 perpound, which processing method should be used? (b) At what selling price for the metal wouldbe two processes be equally economical?Answer with complete solution brief explanation. Thank you.An electronics firm invested $50,000 in a precision inspection device. They spend $1500 each year to operate and maintain it. An additional $750 is spent in years 2 and 4 for software updates. At the end of 5 years, the firm changed their inspection procedure, eliminating the need for the device. The purchasing agent was very fortunate to sell the inspection device for $40,000, the original price. Compute the equivalent uniform annual cost during the 5 years the device was used. Assume interest at 10% per year.You plan to make a lump-sum deposit of $5000 now into an investment account that pays 6% per year, and you plan to withdraw an equal end-of-year amount of $1000 for 5 years, starting next year. At the end of the sixth year, you plan to close your account by withdrawing the remaining money. Define the engineering economy symbols involved.
- A consulting engineering firm is considering two models of SUVs for the company principals. A GM model will have a first cost of $36,000, an operating cost of $4000, and a salvage value of $15,000 after 3 years. A Ford model will have a first cost of $32,000, an operating cost of $3100, and also have a $15,000 resale value, but after 4 years. (a) At an interest rate of 15% per year, which model should the consulting firm buy? Conduct an annual worth analysis. (b) What are the PW values for each vehicle?A new office building was constructed 5 years ago by a consulting engineering firm. At that time the firm obtained a bank loan for $600,000 with a 12% annual interest rate, compounded quarterly. The loan terms call for equal quarterly payments for 10 years. The loan also allows for its prepayment at any time without penalty. The firm proposes to refinance the loan through an insurance company. The new loan would be for a 20-year term with an interest rate of 8% per year, compounded quarterly. The insurance company requires the payment of a 5% loan initiation charge (often described as a “5-point loan fee”), which will be added to the starting balance. (a) What is the balance due on the original mortgage if 16 payments have been made? (b) What is the difference between the old and new quarterly payments?there are three machines in the mechanicle angineering lab A ,B , and C and need to be evaluted economically, machine A has first cost of $4500,an annual operating cost(AOE) of $900, a salvage value of $200 and a service life 4 year. machine B has first cost of $3500, an annual operating cost(AOE) of $700, a salvage value of $350, and a service life 4 year. machine C has first cost of $6000, an annual operating cost(AOE) of $50, a salvage value of $100 and a service life 8 year. which machine should be selected ? the MARR is 10% per year. (a) machine A (B) machine B (c) machine C (d) none
- A fresh graduate engineer decides to start a consulting firm by borrowing $130,000 at interest rate of 13% per year interest, using the formula: a) What is the loan payment each year to pay off the loan in 7 years?, b) Using the above calculation, draw the cash flow diagram Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.In order to build a new warehouse facility, the regional distributor for Valco Multi-position Valves borrowed $1.6 million at 10% per year interest. If the company repaid the loan in a lump sum amount after 2 years, what was (a) the amount of the payment, and (b) the amount of interest?A new engineering graduate who started a consulting business borrowed money for 1 year to furnish the office. The amount of the loan was $45,800, and it had an interest rate of 10% per year. However, because the new graduate had not built up a credit history, the bank made him buy loan-default insurance that costs $900. In addition, the bank charged a loan set-up fee of 1% of the loan principal. What was the effective interest rate the engineer paid for the loan?