Dd1. A granary has two options for a conveyor used in the manufacture of grain for transporting, filling or emptying. One conveyor can bepurchased and installed for $95,000 with $1.500 salvage value after 16 years. The other can be purchased and installed for $95.000with $2,500 salvage value after 16 years. Operation and maintenance for each is expected to be $15.000 and $15,500 per year.respectively. The granary uses MACR6-GDS depreciation, has a marginal tax rate of 25%, and has a MARR of 9% after taxes.Click here to access the TVM Factor Table CalculatorClick here to access the MACRS-GDS table.PartaYour answer is correct.Determine which alternative is less costly, based upon comparison of after-tax annual worth. Alternative 1:Show the AW values used to make your decisionConveyor 1:5Conveyor 2: S2070421056 Conveyor 2: $Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is£10.Part b-21056Save for LaterAttempts: 1 of 3 usedWhat must the cost of the second (more expensive) conveyor be for there to be no economic advantage between the two?Cost of the second conveyor: $Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is+10.Attempts: 0 of 3 used Submit Answer

Given information Two Conveyor Conveyor 1: Initial investment =$90000 Operational cost=$14000…

A granary has two options for a conveyor used in the manufacture of grain for transporting, filling, or emptying One conveyor can be purchased and installed for $95,000 with $1.500 salvage value after 16 years. The other can be purchased and installed for $95.000 with $2,500 salvage value after 16 years. Operation and maintenance for each is expected to be $15,000 and $15.500 per year. respectively. The granary uses MACR6-GDS depreciation, has a marginal tax rate of 25%, and has a MARR of 9% after taxes. Click here to access the TVM Factor Table Calculator Click here to access the MACRS-GDS table.

A granary has two options for a conveyor used in the manufacture of grain for transporting, filling, or emptying One conveyor can be purchased and installed for $95,000 with $1.500 salvage value after 16 years. The other can be purchased and installed for $95.000 with $2,500 salvage value after 16 years. Operation and maintenance for each is expected to be $15,000 and $15.500 per year. respectively. The granary uses MACR6-GDS depreciation, has a marginal tax rate of 25%, and has a MARR of 9% after taxes. Click here to access the TVM Factor Table Calculator Click here to access the MACRS-GDS table.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Maxx International is considering one of two forklifts trucks for its assembly plant. Truck A costs $15,000 and requires $3,000 monthly in operating expenses. It will have a salvage value of $5,000 at the end of its three-year service life. Tuck B costs $20,000 but requires only $2,000 annually in operating expenses; its service life is 4 years; at which time, its expected salvage value will be $8,000. The MARR is 10%. Assuming that the trucks are needed for 12 years and that no significant changes are expected in the future price and functional capacity each truck, select the most economical truck based on AE analysis. Fill in the blanks: a. Firm's MARR for truck A ? ......................................................... b First Cost for truck A? ......................................................... First cost for truck B? ............................................................ c Monthly opening costs for truck A ................................ Monthly…
Maxx International is considering one of two forklifts trucks for its assembly plant. Truck A costs $15,000 and requires $3,000 monthly in operating expenses. It will have a salvage value of $5,000 at the end of its three-year service life. Tuck B costs $20,000 but requires only $2,000 annually in operating expenses; its service life is 4 years; at which time, its expected salvage value will be $8,000. The MARR is 10%. Assuming that the trucks are needed for 12 years and that no significant changes are expected in the future price and functional capacity each truck, select the most economical truck based on AE analysis. Fill in the blanks: Costs of ownership for truck A Operating costs for truck A ........................................ Total annual costs for truck A ....................
A granary purchases a conveyor used in the manufacture of grain for transporting, filling, or emptying. It is purchased and installed for $70,000 with a market value for salvage purposes that decreases at a rate of 20% per year with a minimum of value $3,000. Operation and maintenance is expected to cost $14,000 in the first year, increasing $1,000 per year thereafter. The granary uses a MARR of 15%. What is the optimum replacement interval for the conveyor?
Question 8 Canada's Wonderland has decided to carry out an analysis to determine when one of its roller coasters should be replaced. The existing roller coaster was purchased 25 years ago for $715,000. The costs of operating and maintaining this ride for a 5-year study period are predicted to be $70,000 in year 1 and would increase by $1,300 each year thereafter (i.e. $71,300 in year 2, $72,600 in year 3, etc.) Canada's Wonderland uses a MARR of 10% for roller coaster projects. (a) If the roller coaster loses value at a rate of 7% per year, what is the salvage value at the end of the study period? (b) What is the EAC for operating & maintenance costs (O&M) after 4 years in the study period? (c) Supposing the salvage value after 2 years in the study period is $100,773, what is the EAC for capital costs after 2 years in the study period? . (d) What is the economic remaining life of the roller coaster (i.e. in the study period)?
A new utility service truck can be purchase for $70,043. Its expected useful life is six years, at which time its market value will the zero. Annual receipts less expenses will be approximately $28,084 per year over the six-year study period. Compute Present Worth (PW) with a MARR of 20% to determine whether this is good investment.
A new engine can be created using either of two methods. Process A will cost P750,000 to start up, P60,000 to operate each year, and P80,000 to salvage at the end of its two-year life. Process B will cost P1,350,000 initially, P25,000 annually, and have a P120,000 salvage value after a 4-year lifespan. At the end of year 2, Process B will also need updating, which will cost P90,000. Write the following on the basis of a future worth analysis with a 12% annual interest rate: A: Blank 1 B: Blank 2
A potential project is currently under review. An initial investment of $87,000 would be necessary for equipment. The annual revenues and expenses are expected to be $40,000 and $19,000 each year, respectively, over the 6-year project period. The salvage value of the equipment at the end of the project period is projected to be $17,000. Assume a MARR of 9%. Find the AW (directly - do not convert from either FW or PW - to the nearest cent).
A company is considering constructing a plant to manufacture a proposed new product. The land costs P300,000, the building costs P600,000, the equipment costs P250,000 and P100,000 additional working capital is required. It is expected that the product will result in sales of P750,000 per year for 10 years, at which time the land can be sold for P400,000, the building for P350,000 and the equipment for P50,000. All of the working capital would be recovered at the end of year 10. The annual expenses for labor, materials, and all other items are estimated to total P475,000. If the company requires a minimum rate of return of 15% per year on projects of comparable risk, determine if it should invest in the new product line. SOLVE FOR ROR MANUALLY.
A company is considering constructing a plant to manufacture a proposed new product. The land costs P300,000, the building costs P600,000, the equipment costs P250,000 and P100,000 additional working capital is required. It is expected that the product will result in sales of P750,000 per year for 10 years, at which time the land can be sold for P400,000, the building for P350,000 and the equipment for P50,000. All of the working capital would be recovered at the end of year 10. The annual expenses for labor, materials, and all other items are estimated to total P475,000. If the company requires a minimum rate of return of 15% per year on projects of comparable risk, determine if it should invest in the new product line. Evaluate using the following methods: a) RORb) Annual Worth Methodc) Present Worth Methodd) Future Worth Method
Texas Popcorn Corporation is planning to fully automate it process. The company CEO is currently looking into three options. Options A costs $450,000, AOC of $55,000, and salvage value of $85,000 after 3 years. Option B will cost $720,000 with an AOC of $68,000 and salvage of $95,000 after 4 years. Option C cost $800,000 with an AOC of $95,000 and salvage of $125,000 after 6 years. Which machine should the company select at an interest rate of 10% per year? Assume the project service life is 8 years. Please note that the salvage value of Equipment A is $230,000 after a two year of use and Equipment C, is $290,000 after two years of operation. Please provide handwritten solution.
Texas Popcorn Corporation is planning to fully automate it process. The company CEO is currently looking into three options. Options A costs $450,000, AOC of $55,000, and salvage value of $85,000 after 3 years. Option B will cost $720,000 with an AOC of $68,000 and salvage of $95,000 after 4 years. Option C cost $800,000 with an AOC of $95,000 and salvage of $125,000 after 6 years. Which machine should the company select at an interest rate of 10% per year? Use annual worth analysis. Assume the project service life is 12 years. Please provide hand written solution.
Texas Popcorn Corporation is planning to fully automate it process. The company CEO is currently looking into three options. Options A costs $450,000, AOC of $55,000, and salvage value of $85,000 after 3 years. Option B will cost $720,000 with an AOC of $68,000 and salvage of $95,000 after 4 years. Option C cost $800,000 with an AOC of $95,000 and salvage of $125,000 after 6 years. Which machine should the company select at an interest rate of 10% per year? Assume the project service life is 15 years. Please provide handwritten solutions.