A machine costs $20,200 and has a 5-year useful life. At the end of the 5 years, it can be sold for $2,400. If the interest rate is 8%, what is the equivalent uniform annual cost of the machine? (Provide exact solution)
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- IPS Corp. will upgrade its package-labeling machinery. It costs $850,000 to buy the machinery and have it installed. Operation and maintenance costs, which are $11,000 per year for the first 3 years, increase by $1000 per year for the machine’s 10-year life. The machinery has a salvage value of 12% of its initial cost. Interest is 25%. What is the future worth of cost of the machinery? dont use excel. dont write answer in a paper becouse of handwriting. thanksAdam leases a truck with an upfront payment 3100 and monthly payments of 116. Assuming there is no additional charges , what I will be the total cost of a 3 year lease?The present price (year 0) of kerosene is $4.30per gallon, and its cost is expected to increase by 10%per year. (At the end of year 1, kerosene will cost$4.73 per gallon.) Mr. Garcia uses about 800 gallons of kerosene for space heating during a winterseason. He has an opportunity to buy a storage tankfor $600, and at the end of four years, he can sell thestorage tank for $100. The tank has a capacity to supply four years of Mr. Garcia’s heating needs. So, hecan buy four years’ worth of kerosene at its presentprice ($4.30), or he can invest his money elsewhereat 6% interest. Should he purchase the storage tank?Assume that kerosene purchased on a pay-as-you-gobasis is paid for at the end of the year. (However,kerosene purchased for the storage tank is purchasednow.)
- Please Solve In 15mins e-hA road can be paved with either asphalt or concrete. Concrete costs $20,000/mile and lasts for 20 years. What is the maximum that should be spent on asphalt, which lasts only 10 years? The annual maintenance costs are $500/mile for both pavements. The cost of money = 8%.**Please help with parts D&E A new furnace for your small factory is being installed right now, will cost $46,000, and will be completed in one year. At that point, it will require ongoing maintenance expenditures of $4,000 a year. But it is far more fuel-efficient than your old furnace and will reduce your consumption of heating oil by 4,300 gallons per year. Heating oil this year costs $3 a gallon; the price per gallon is expected to increase by $0.50 a year for the next 3 years and then to stabilize for the foreseeable future. The furnace will last for 20 years from initial use, at which point it will need to be replaced and will have no salvage value. (Specifically, the firm pays for the furnace at time 0, and then reaps higher net cash flows from that investment at the end of years 1 – 20.). The discount rate is 10%. a. What is the net present value of the investment in the furnace? (Do not round intermediate calculations. Round your answer to the nearest whole dollar.) b.…
- A typical tube-style incandescent light bulb lasts for 1,000 hours and is available to consumers for $3.30 per bulb. A manufacturer has produced a tube-style halogen light bulb that gives the same amount of light as the incandescent bulb but lasts for 1,400 hours. The halogen bulb also uses less energy than the incandescent bulb, saving the consumer $0.50 in electricity costs for every 1,000 hours of light-bulb use. (a) What is the value to the customer of the manufacturer’s tube-style halogen light bulb to consumers who are currently buying tube-style incandescent light bulbs? Show your work. (b) If the manufacturer’s variable costs for producing these halogen light bulbs are $2.25 per bulb, specify the price ceiling and the price floor for these halogen bulbs. Explain your reasoning. (c) According to the course material, what is meant by the strategic prominence of price? If the halogen light bulb manufacturer wants to make price the lead activity in the marketing mix,…A manufacturer is considering replacing a production machine tool. The new machine, costing $3700, would have a life of 4 years and no salvage value, but would save the firm $500 per year in direct labor costs and $200 per year indirect labor costs. The existing machine tool was purchased 4 years ago at a cost of $4000. It will last 4 more years and will have no salvage value at the end of that time. It could be sold now for $1000 cash.Assume that money is worth 8% and that the difference in taxes, insurance, and so forth, for the two alternatives is negligible. Use an annual cash flow analysis to determine whether the new machine should be purchased.Compute the annual equivalent repair cost over a 5 year life if a typewriter is warranted for 2 years and has estimated repair cost of $1000 annually. Use i = 10%. Shoe your solution.
- A purchase of a new machine is being evaluated. If we assume 12% annual interest, what is the Equivalent Uniform Annual Cost? Choose the nearest answer. Initial Cost $30,000 Annual Maintenance $1,500 Salvage Value $5,000 Life 6 yearsA construction firm needs a new small loader. It can be leased from the dealer for $5,500 per year for three years. This annual fee will include all maintenance. Or they can purchase the loader for $20,000. The firm expects it to have a salvage value of $7,000 after 7 years. The maintenance will be $500 the first year and then increase by $300 each year. The firm's interest rate is 12% per year. Compare the EUAC for leasing and buying the loader.what should the resale value of a machine if it is bought at 100000 that will produce net income, after operating expenses of 10000 per year at the end of 4 years to justify the investments you must make a 15% annual return on the investment.