A machine costs P150,000 and will have a scrap value of P10000 when retired at the end of 15 years. If money is worth 4%, find the annual investment and the capitalized cost of the machine
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A machine costs P150,000 and will have a scrap value of P10000 when retired at the end of 15 years. If money is worth 4%, find the annual investment and the capitalized cost of the machine
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- A contractor has purchased a wheel loader for $115,000 and plans to use it for 2,000 hours per day. The cost of one set of tires is $25,000. At this usage rate, the contractor anticipates disposing of the loader after using it for 10 years and realizing a salvage value of $35,000. The flywheel horsepower rating of the loader's diesel engine is 105 horsepower. The interest rate is 10%. The loader operator will earn $34.00 per hour including fringe benefits, and diesel fuel costs $1.20 per gallon. How much is the contractor's hourly ownership cost for the loader if using time value money analysis?You purchased a CNC machine for $50,000. It is expected to have a useful life of 8 years and a salvage value of $4,000. At i = 12%, what is the annual capital cost of this machine?Steve Company is considering replacing one of its machines. The available new model has a cost of $220,000, a 16-year life, and an AOC of $2,000. The machine must also be serviced every 4 years at a cost of $10,000. The machine can be salvaged at $45, 000. The MARR is 12% How much annual net income must be realized from the machine to recover the capital investment?
- Five machines were originally estimated to have useful life of twelve years. If sold now, each can be sold for P5,500. The annual operating costs for each are one operator at P22.00 a day, 300 days a year; a yearly energy utilization is 6,000 kw-hr at P0.50 per kw-hr; upkeep including spare parts are estimated P700 a year. Taxes and insurance are 7% of first cost. The machine has the same capacity as the fivbe machines and is now available at an estimated first cost including installation of P80, 000. Sinking fund method is used at 15% in computation od depreciation. Will you recommend replacementif money is worth 20% to a company?The industrial equipment is worth P300,000 has an estimated life of 12 years with a salvage value of P45,000. Compute the book value after 8 years using the sinking fund method assuming I = 10%A presently owned machine has the projected market value and M&O costs shown below. At an interest rate of 10% per year, the AW for keeping the machine 2 more years is closest to: (a) $29,650 (b) $32,840 (c) $35,770 (d ) $39,720 Year Market Value, $ M&O Cost, $ 0 32,000 — 1 25,000 24,000 2 14,000 24,000 3 10,000 26,000 4 8,000 29,000
- A large city in the midwest needs to acquire a street-cleaning machine to keep its roads looking nice year round. A used cleaning vehicle will cost $85,000 and have a $20,000 market (salvage) value at the end of its five-year life. A new system with advanced features will cost $150,000 and have a $40,000 market value at the end of its five-year life. The new system is expected to reduce labor hours compared with the used system. Current street-cleaning activity requires the used system to operate 8 hours per day for 20 days per month. Labor costs $50 per hour (including fringe benefits), and MARR is 12% per year. (11.2) a. Find the breakeven percent reduction in labor hours for the new system. b. If the new system is expected to beable toreduce labor hours by 17% compared with the used system, which machine should the city purchase?A company is considering constructing a plant to manufacture a proposed new product. The land costs $300,000, the building costs $600,000, the equipment costs $250,000, and $100,000 additional working capital is required. It is expected that the product will result in sales of $750,000 per year for 10 years, at which time the land can be sold for $400,000, the building for $350,000, and the equipment for $50,000. All of theworking capital would be recovered at the EOY 10. Theannual expenses for labor, materials, and all other itemsare estimated to total $475,000. If the company requiresa MARR of 15% per year on projects of comparable risk,determine if it should invest in the new product line.Use the AW method.Suppose the reader has an old car, which is a gas guzzler. It is 10 years old and could sell for $400 cash to a local dealer. Assume that your MV in two years is zero. For the foreseeable future, annual maintenance expenses will average $800, and the car will get only 10 miles per gallon. Gasoline costs $1.50 per gallon, and the car is used an average of 15,000 miles per year. You now have the opportunity to replace your old car with a better one that costs $8,000. If I bought it, I would pay cash. Maintenance costs are expected to be negligible since it has a two-year warranty. This car averages 30 miles per gallon. Use the IRR method to determine which alternative should be selected. Use a two-year analysis period and assume that the new vehicle can sell for $5,000 at the end of year two. The MARR is 15% per year. Mention any other assumptions you make.
- A new boiler was installed by a textile plant at a cost of P 3M and projected to havea useful life of 15 years. At the end of its life its estimated salvage value is P100,000. Determine its capitalized cost at an interest of 12%.A hospital in NYC area bought a diagnostic machine at a cost of $40,000. Maintenance cost is expected to remain constant throughout the life of this machine at $2,000 per year. The salvage value is estimated to be “0” at the end of the useful life of 10 years. Determine the economic life of this machine. MARR = 10% A. 5 years B. 1 year C. 10 years D. 7 yearsA company is considering pursuing a project with an initial cost of $200,000 annual operating and maintenance costs of $40,000, and annual sales revenues (income) of $80,000 . The project has a useful life of 9 years and will have no salvage value after 9 years .What is the conventional payback period for this project?