2. Evaluate an electronic fabrication machine on the basis of the annual worth method when the MARR is 8% per year. Relevant cost data are as follows: Electronic Fabrication Machine Investment cost $15,000 Useful life 12 years Market (salvage) value at end of useful life $5,000 Annual operating expenses Overhead cost-end of 6th year $800 $1000 Overhead cost-end of 10th year $1500

2. Evaluate an electronic fabrication machine on the basis of the annual worth method when the MARR is 8% per year. Relevant cost data are as follows: Electronic Fabrication Machine Investment cost $15,000 Useful life 12 years Market (salvage) value at end of useful life $5,000 Annual operating expenses Overhead cost-end of 6th year $800 $1000 Overhead cost-end of 10th year $1500

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 10E

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Solve, a. Compare the probable part cost from Machine A and Machine B, assuming that each will make the part to the same specification. Which machine yields the lowest part cost? Assume that the MARR = 10% per year. b. If the cost of labor can be cut in half by using part-time employees, which machine should be recommended?
It is proposed to place a cable on existing pole line along the shore of a lake to connect two points on opposite sides. Which is more economical? Compare alternatives using the following methods:a) ROR on Additional Investment Methodb) Annual Cost Methodc) Equivalent Uniform Annual Cost Methodd) Present Worth Cost Method Show complete manual solution
1. A replacement electric motor is being considered for purchased. It is capable of providing 200 hp. The pertinent data are follows: Cost - 3200 dollars Maintenance Cost per year - 50 dollars Life expectancy - 14years Salvage value - 1,452 dollars The motor is used for 400 h/year and the cost of electricity is 0.0 dollars/kWh. What is most nearly the effective annual cost using an interest rate of 10%
A company is trying to decide whether to keep a fork-truck in their factory or to purchase a new one. The existing fork-truck can be sold now for $28,000 or kept for another 5 years with an overhaul now costing $8,250. If the MARR is 10% should the company buy a new AVG now or keep the existing vehicle? Existing Fork-truck New Fork-truck Initial price cost, $ -34,250 (5 yrs ago) -38,250 AOC, $ -5,500 -7,800 Salvage value, $ 2,500 5,500 Life, yrs 10 12
The data provided by a company for the year 2021 - 2022 to carry out Break Even Analysis. Provide the results, complete analysis and suggestions. The data is as follows: The fixed cost of the year is 80000.0 R.O The estimated sales are 400000.0 R.O Material Cost / unit 10.0 R.O Production cost / unit 1S 20.0 R.O Transportation & other Misc Cost / unit (Approx) 5.00 R.O Marketing and advertisement cost / unit 3 R.O Each unit is sold at price 50.0 R.O 1. Construct the B.E.P chart on a graph sheet and indicate, B.B.P, M.o.s. 2. Indicate B.E.P & M.o.S after the improvement measures has been taken (With different colours). 3. Determine the profit before and after the measures taken.
A specialty concrete mixer used in construction was purchased for $300,000 7 years ago. Its annual O&M costs are $105,000. At the end of the 8-year planning horizon, the mixer will have a salvage value of $5,000. If the mixer is replaced, a new mixer will require an initial investment of $375,000 and at the end of the 8-year planning horizon, the new mixer will have a salvage value of $45,000. Its annual O&M cost will be only $40,000 due to newer technology. Use an EUAC measure and a MARR of 15% to see if the concrete mixer should be replaced if the old mixer is sold for its market value of $65,000. Solve, a. Use the cash flow approach (insider’s viewpoint approach). b. Use the opportunity cost approach (outsider’s view point approach).
It is proposed to place a cable on existing pole line along the shore of a lake to connect two points on opposite sides. Which is more economical?Compare alternatives using the following methods:a) ROR on Additional Investment Methodb) Annual Cost Methodc) Equivalent Uniform Annual Cost Methodd) Present Worth Cost Method
A specialty concrete mixer used in construction was purchased for $300,000 7 years ago. Its annual O&M costs are $105,000. At the end of the 8-year planning horizon, the mixer will have a salvage value of $5,000. If the mixer is replaced, a new mixer will require an initial investment of $375,000. At the end of the 8-year planning horizon, it will have a salvage value of $45,000. Its annual O&M cost will be only $40,000 due to newer technology. Analyze this using an EUAC measure and a MARR of 15 percent to see if the concrete mixer should be replaced if the old mixer is sold for its market value of $65,000. a. Use the cash ﬂow approach (insider’s viewpoint approach) b. use the opportunity cost approach (outsiders viewpoint approach) Include formulas in excel screen shots.
Evaluate a combined cycle power plant on the basis of the FW method when the MARR is 12% per year. Pertinent cost data are as follows : Power Plant (thousands of $) Investment cost $13,000 Useful life 15 years Market value (EOY 15) $3,000 Annual operating expenses $1,000 Overhaul cost—end of 5th year $200 Overhaul cost—end of 10th year $550 WITH DIAGRAM CASH FLOW THANK YOU
Show complete solutiion. Do not use excel. Manual Method. Steel drums manufacturer incurs a yearly operating cost of P 200,000. Each drum manufactured cost P 160 and sells for P 300. A machine use for the production has a first cost of P 20,000 and a salvage value of P 2,000 after producing 1,000 units. What is the break even number of units per year?
Two lathes are being considered in the manufacture of certain machine parts. Data is given below, all cost in peso: LATHE A LATHE B First Cost 40,000 56,000 Salvage Value 5,000 7,000 Annual Maintenance 2,000 2,800 Operation, Cost/hour 4 3.5 Life, in years 10 12 Time per part (hours) 0.40 0.25 REQUIRED: Determine the number of machine parts/year that could be produced so that 2 lathes will be equally economical if the MARR is 18%. Use AWM If the number of parts is 10,000 units, which lathe will you recommend? Use ROR If the number of parts is 10,000 units, which lathe will you recommend? Use PWM If the number of parts is 10,000 units, which lathe will you recommend? Use EUAC
Two processes are being considered for the production of a machine part. Process 1 requires an equipment cost of P180 000.00, a yearly operating cost of P90 000.00, and has zero salvage value at the end of its 6-year life. Process 2 has corresponding figures of P320 000.00, P72 000.00, P45 000.00 and 9-year life. If the applied MARR is 20%, compare the two processes using PW analysis. (Ans. PT1 = -P693 567.36; PT2= - P718 084.62)- Please use and actual formula NOT AN EXCEL PLEASE. We are students not office workers.