Question 12 and 13 do u work onlyFull explain this question and text typing work only thanks A bakery needs to replace its old oven that has broken. It is considering the following options. Use MARR-8%.Initial CostAnnual operating costSalvage ValueUseful LifeQuestion 10Graber common divisorLast common multiplesAn analysis period that is equal to any of the alternatives' livesThe longest period from the alternativesa) When the useful lives of alternatives differ, we can use the of their useful lives it we are doing present worth analysisQuestion 11b) Based on your answer in part a, what would be the analysis period we would need for this problem?Question 12Still need to compute and use the answer in partaDo not need to use the answer from part a, if we assume identical replacementsC Cannot compute the annual worth analysisOven AQuestion 13$4500d) What is the annual equivalent cost for oven A using the useful life? Round to the nearest integer$700c) If we do annual worth analysis instead of present worth analysis when alternatives have unequal useful lives, we-$10004 yearsOven B$7000$500$15006 years

Given Oven A Oven B Initial cost $4500 $7000 Annual operating cost $700 $500 Salvage…

A bakery needs to replace its old oven that has broken. It is considering the following options. Use MARR-8%. Initial Cost Annual operating cost Salvage Value Useful Life Question 10 Gwater comnா பிள்ள Con multiple Analyspried that is equal to any of the alternatives lives The longest period from the alternatives Question 11 b) Based on your answer in part a, what would be the analysis period we would need for this problem? a) When the useful lives of alternatives differ, we can use the of their useful lives it we are doing present worth analysis Question 12 C Sil need to compute and use the answer in part a Do not need to use the answer from part a, if we assume identical replacements C Cannot compute the annual worth analysis Oven A Question 13 $4500 What is the annual equivalent cost for oven A using the useful ire? Round to the nearest integer $700 c) If we do annual worth analysis instead of present worth analysis when alternatives have unequal useful lives, we $1000 4 years Oven B $7000 $500 $1500 6 years

A bakery needs to replace its old oven that has broken. It is considering the following options. Use MARR-8%. Initial Cost Annual operating cost Salvage Value Useful Life Question 10 Gwater comnா பிள்ள Con multiple Analyspried that is equal to any of the alternatives lives The longest period from the alternatives Question 11 b) Based on your answer in part a, what would be the analysis period we would need for this problem? a) When the useful lives of alternatives differ, we can use the of their useful lives it we are doing present worth analysis Question 12 C Sil need to compute and use the answer in part a Do not need to use the answer from part a, if we assume identical replacements C Cannot compute the annual worth analysis Oven A Question 13 $4500 What is the annual equivalent cost for oven A using the useful ire? Round to the nearest integer $700 c) If we do annual worth analysis instead of present worth analysis when alternatives have unequal useful lives, we $1000 4 years Oven B $7000 $500 $1500 6 years

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

See similar textbooks

Similar questions

Alternative 3 is incorrect EUAC=( Equivalent Annaul COst of Initial Investment)+ (Expected Moderate annaual flood damage cost )+ (expected severe annaual flood cost )
A manufacturer with a MARR of 20% is considering the installation of one of three packaging machines. The economic parameters of each machine are as follows: Packaging machine: X Y Z Initial cost ($) 20,000 40,000 15,000 Uniform annual benefit ($) 120,000 180,000 100,000 Uniform annual O&M cost ($) 70,000 50,000 70,000 Service life (years) 6 3 12 Salvage value end of life ($) 2,000 4,000 2,000 The present worth (PW) for machine X over the 12 years analysis period is:
A project is being planned that has an initial investment at time 0, annual revenuesand expenses, and a salvage value at the end of the project lifespan (20 years). The financialvalues are summarized below:Initial investment amount at time 0 $150,000Estimated annual revenue $34,500 per yearEstimated annual expenses $8,700 per yearEstimated salvage value at end of lifespan $10,000Minimum attractive rate of return (MARR) 15%a. Calculate the capital recovery amount CR(i%).b. Using the annual worth (AW) method, determine whether purchasing the equipmentis economically justified.c. Repeat part (a) using the internal rate of return (IRR) method based on annual worth(AW).d. Using the present worth (PW) method, determine the break-even time period afterwhich purchase of the equipment generates a profit. (Find N when PW = 0) year period.
A corporation uses a type of motor truck which costs P 250,000, with life of 2 years and final salvage value P 40,000. If money is worth 4% and using the annual cost method, what should be the life, in years, of another type of truck for the same purpose whose that cost P 312,614 with final salvage value P 50,000? Select one: a. 2.5 b. 4 c. 3.5 d. 3
Margaret has a project with a £ 28,000 first cost that returns £ 5,000 per year over its 10-year life. It has salvage value of £ 2,900 at the end of 10 years. If the MARR is 11 %, (Use 5 significant figures for your calculations, and round your answers to the nearest dollar. Indicate losses as a negative value.) (a) What is the present worth of this project? (b) What is the annual worth of this project? (c) What is the future worth of this project after 10 years?
1.) Clinix is considering four independent projects. Given: All the projects will be economically viable for only 10 years; Company’s MARR = 12% per year Find: Which project should be selected based on a present worth analysis. *Note* Financial values are in $1,000 units. Project A Project B Project C Project D First Cost ($) -2,700 -1,400 -10,000 -9,500 Annual Net Profit ($/year) 800 1,200 2,400 3,200 Salvage Value ($) 25 30 45 60
Given the two machines’ data Machine A Machine B First Cost P8,000.00 P14,000.00 Salvage value 0 2,000.00 Annual operation 3,000.00 2,400.00 Annual maintenance 1,200.00 1,000.00 Taxes and insurance 3% 3% Life, years 10 15 Money is worth at least 16% Using equivalent uniform annual cost method, determine the value of alternative A and alternative B: ANSWER for ALTERNATIVE A: Blank 1 ANSWER for ALTERNATIVE B: Blank 2
Use Formula, not the table. Your company is environmentally conscious and is looking at two heating options for a new researchbuilding. What you know about each option is below, and your company will use an annual interest rate of 8%for this decision: Gas Heating Option: The initial equipment and installment of the natural gas system would cost $225,000 rightnow. The maintenance costs of the equipment are expected to be $2,000 per year, starting next year, for eachof the next 20 years. The energy cost is expected to be $5,000, starting next year, and is expected to rise by 5%per year for each of the next 20 years due to the price of natural gas increasing. Geothermal Heating Option: Because of green energy incentives provided by the government, the geothermalequipment and installation are expected to cost only $200,000 right now, which is cheaper than the gas lines.There would be no energy cost with geothermal, but because this is a relatively newer technology, themaintenance costs…
AN INDUSTRIAL PLANT IS CONSIDERING THE PURCHASE OF A CENTRIFUGAL PUMP. THREE OFFERS WERERECEIVED AND BASIS OF SELECTION HAVE BEEN TABULATED AS FOLLOWS: OFFER A OFFER B OFFER CPRICE OF PUMP P 60,000.00 P 96,000.00 P 120,000.00ECONIMIC LIFE (YEARS) 3 5 10SALVAGE VALUE @ END OF ECONOMIC LIFE P 5,000.00 P 10,000.00 P 8,000.00YEARLY MAINTENANCE COST 10,000.00 6,000.00 5,000.00IF COST OF MONEY IS 14%, WHAT OFFER WOULD YOU RECOMMEND TO BE PURCHASED? USE ROR METHOD.
Given the two machines’ data Machine A Machine B First Cost P8,000.00 P14,000.00 Salvage value 0 2,000.00 Annual operation 3,000.00 2,400.00 Annual maintenance 1,200.00 1,000.00 Taxes and insurance 3% 3% Life, years 10 15 Money is worth at least 16% Using equivalent uniform annual cost method, determine the value of alternative A and alternative B: note:round off final answer to 2 decimal ANSWER for ALTERNATIVE A: ANSWER for ALTERNATIVE B:
Your company is considering the introduction ofa new product line. The initial investment required forthis project is $500,000, and annual maintenance costsare anticipated to be $45,000. Annual operating costswill be directly proportional to the level of productionat $8.50 per unit, and each unit of product can be soldfor $65. If the MARR is 15% and the project has a life of5 years, what is the minimum annual production levelfor which the project is economically viable? With Cash Flow Thank You
Consider these two alternatives.Alternative A Alternative BCapital investment OMR 6000 7500Annual revenues OMR 1800 2250Annual expenses OMR 500 750Estimated market valueOMR1200 1600Useful life 10 10MARR 12% 1. Recommend which alternative should be selected.2. How much capital investment of the expensive alternative have to vary so that theinitial decision would be reversed.