Given the following:What is most nearly the effective annual cost using an interest rate of 10%? A replacement electricAmotor is being considered for purchase. It is capable of providing200 hp. The pertinent dataA are as follows:Cost$3,142.31Maintenance cost per year148.8Useful Life14 yearsSalvage value$770.78The motor is used for 400 hours/year and the cost of electricity is $0.06/kW*h (1 hp =%3D0.746 kW). What is most nearly the effective annual cost using an interest rate of 10%?

Given, Initial Cost : $3,142.31 Maintenance Cost : 148.8 Useful Life : 14 years Electricity Cost :…

Answered: A replacement electric motor is being…

A replacement electric motor is being considered for purchase. It is capable of providing 200 hp. The pertinent data are as follows:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: FootballComm LLC is a manufacturer of devices for football coaches and their coaching staffs that…

A: Here we calculate the economic worth of producing the headsets by calculating the net present worth…

Q: A company in Batangas is planning to buy a new gantry crane that has a capacity of 50 tons. In the…

A: Annual Cost methods/EUAC provides information about the operating and owing annual costs of a…

Q: Assume the MARR is 10% per year for this analysis. A presently owned machine that was purchased 8…

A: Defender: the annual cost of the defender (ACD) is $120,000 per year. The salvage value (SVD) is…

Q: Being "early to market" with a new product often results in grabbing relatively high levels of…

A: For a cash flow diagram - Cash inflows are denoted as up arrows Cash outflows are denoted as down…

Q: transportation engineer received a request to install dynamic traffic signals to replace static…

A: PW for the operating budget = 35000+ 12000+1000/(1.08)…

Q: An engineer calculated the AW values shown for retaining a presently owned machine additional years.…

A: For the given question, it need to be found out when should the company replace the defender.

Q: PT POQ Indonesia plans to produce a new product that requires an initial investment of IDR 150…

A: Initial Investment = 150 million Maintenance Cost = 3500 per hour Other cost = 75 million per year…

Q: A piece of equipment that was purchased 2 years ago by Toshiba Imaging for $50,000 was expected to…

A: In a replacement study, the existing hardware or asset that has to be replaced is referred to as the…

Q: rently is operating at a sales level of only 1,200 ts, with a selling price of P720 per unit. The…

A: A) Present Revenue = 720*1200 => 8,64 000 Present costs Particular Amount (1200 units)…

Q: If you have reliable economic forecast for five years only, and you would like to evaluate two…

A: Annual worth is the worth that is used to compare the alternatives. means that all incomes and…

Q: Your firm is considering which of two devices to install to reduce costs and has asked you to…

A: For the Device A: Useful life = 5 years Cost = $21000 Annual savings = $7500 Salvage value = $2000…

Q: Company XYZ is an electric car manufacturer. The company produces and sells two models: Standard and…

A: The above question has been solved using the Goal Seek function in MS Excel as shown below.

Q: • The recovery period of an asset in petroleum refineries plant is 16 years using the straight-line…

A: Recovery period for asset of petroleum refineries is 3 to 5 years.

Q: The engineer of a medium scale industry was instructed to prepare two plans to be considered by…

A: Plan-A Initial investment=P200000 Salvage value =20% of first cost for 20 years Maintenance…

Q: CB Electronix must buy a piece of equipment to place electronic components on the printed circuit…

A: Comparing the 2nd option with the 1st option, IRR (r) of the 2nd option is - 140000/r × (1-1/(1+r)10…

Q: Chemitronix Ltd. is a microchips manufacturing company. It was found that the business is at the…

A: Expected Value = ∑ Probability*Outcome For the above question we will compute expected values of…

Q: To decrease the costs of operating a lock in a large river, a new system of operation is proposed.…

A: With capitalized costs, the monetary worth isn't leaving the organization with the acquisition of a…

Q: 1. Compute the selling price if the contribution margin percentage is 25% and contribution margin…

A: Given Contribution margin percentage =25% Contribution margin per unit =P25000 We have to calculate…

Q: Equipment that was purchased by Newport Corporation for making pneumatic vibration isolators cost…

A: a) The present value is 90,000-8,000(k), where ‘k’ indicates the number of years. The machine was…

Q: A factory manager bought a rare machine for $10 million. of the machine The sales value at the end…

A: To find the economic life out of the following options we will find the annual worth of the rare…

Q: The Asian Transmission Company makes and sells certain automotive parts. Present sales volume is…

A: Sales volume = 500000 Selling price = 0.50 Total expenses = 80000

Q: e annual maintenance cost of a machine shop is P56,000. If the cost of making a forging is P60.00…

A: Given fixed maintainance cost = 56000 Variable cost per unit = 60 Selling price = 2x = 120

Q: A company produces electric devices, the fixed cost is 30,000 LE and the variable cost is 100 LE per…

A: The amount cash that the offer of every unit will add to taking care of total fixed costs is known…

Q: A large city in mid-west needs to buy a street-cleaning machine. A used vehicle will cost $75000 and…

A: Two other options: Used vehicle and new framework Doing the current worth examination to think about…

Q: A company in Batangas is planning to buy a new gantry crane that has a capacity of 50 tons. In the…

A: Equivalent Annualized Uniform methods provides information about operating and owing annual costs of…

Q: A company manufacturing calculators has a capacity of producing 200 calculators a month. The…

A: The total cost incurred by a firm operating in a market includes fixed costs and variable costs.…

Q: A company is considering two types of equipment for its manufacturing plant. The data were as…

A: Given that; Type A Type B Initial cost= $300,000 Initial cost= $400,000 Annual Operating Cost…

Q: A generator is purchased on the basis of guaranteed performance. A test indicates that the operating…

A: Operating costs are ongoing expenses incurred as a result of the normal day-to-day operations of a…

Q: An initial investment of P20, 000, 000 was put up for a new business that will produce an annual…

Q: Illustrate the procedure of break-even analysis based on NPW?

A: The break-even analysis determines the point of output where the total cost is equal to total…

Q: Two proposals were introduced to a telecom company manger to increase the internet speed. Proposal A…

A: Proposal A Initial Cost = 8000000 Operating Cost = 2,00,000 Salvage Value = 2,70,000 Cleaning Cost…

Q: An equipment has a first cost of P10, 000 a salvage value of P1000 at the end of 10years.Determine…

A: Declining balance method:- Rate of depreciation = 100% / life of assets…

Q: For P500, 000, an engineer purchased a piece of equipment. He added another P40,000 to his budget…

A: Depreciation per year (D) = Cost of the Asset - Salvage ValueUseful LifeD = (500000 + 40000) - x%…

Q: Assume an alternative has a 3-year life and that you calculated its AW value over its 3-year life…

A: The formula to calculate the annual worth. A = F(A/F, i, n) F = Accumulated sum of amount. i =…

Q: The cost of the equipment is P550,000 and the cost of handling and installation is P28,000. If the…

A: Salvage value refers to the estimated value of a fully depreciated asset, that is, the asset's value…

Q: An aluminum extrusion plant manufactures a particular product at a variable cost of $0.04 per unit,…

A: The Break-even point refers to the level of production at which the production cost equals the…

Q: A granary purchases a conveyor used in the manufacture of grain for transporting, filling, or…

Q: A bridge is to be constructed now as part of a new road. Engineers have determined that traffic…

A: * SOLUTION :-

Q: GMA will be visiting an automobile plant. It was decided by the plant management that they must…

A: Boysen Cost of Paint = 70 per gallon Covers = 350sq. ft per gallon time period = 5 years applied…

Q: A 20 kW enclosed motor with a load factor of 70% and an efficiency of 87.5% will be replaced by a…

A: KWe = (KW x LF) x 1old efficiency-1new efficiency

Q: The Ajax Corporation has an overhead crane that has an estimated remaining life of 10 years. The…

A: The annual worth (AW) project is an equal series of amounts for N periods which are equivalent to…

Q: NASA designed the Mars Climate Orbiter spacecraft to collect data about Mars' atmospheric con-…

A: How could such a mistake have occurred between the two teams? This is the pure case of…

Q: Two alternative designs are under consideration for a tapered fastening pin. The fastening pins are…

A: Given: The fastening pins are sold for = $0.70 each Design A will require 12 hours of lathe time and…

Q: Two automatic systems for dispensing maps are being compared by the state highway department. The…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: What are the Flaws in Project Ranking by IRR?

A: IRR is nothing but an internal rate of return; it is the rate of discount which makes a project that…

Q: Two alternative designs are under consideration for a tapered fastening pin. The fastening pins are…

A: Operating cost of lathe including labor = $18.60 per hr Operating cost of drill including labor =…

Q: Use the information given below to calculate the annual Economic Order Quantity The following…

A: The order amount that minimizes the overall holding costs and ordering expenses is known as the…

Q: DBM, determine the appreciation charge

A: Straight line (SL) depreciation rate = 1 / useful life = 1/5 = 0.2 DBM depreciation rate = 2 x SL…

Question

Given the following:

What is most nearly the effective annual cost using an interest rate of 10%?

A replacement electricAmotor is being considered for purchase. It is capable of providing
200 hp. The pertinent dataA are as follows:
Cost
$3,142.31
Maintenance cost per year
148.8
Useful Life
14 years
Salvage value
$770.78
The motor is used for 400 hours/year and the cost of electricity is $0.06/kW*h (1 hp =
%3D
0.746 kW). What is most nearly the effective annual cost using an interest rate of 10%?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

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…
A firm is considering which of twodevices to install to reduce costs. Both devices have useful lives of 5 years and no salvage value. Device A costs $10,000 and can be expected to result in $3000 savings annually. Device B costs $13,500 and will provide cost savings of $3000 the first year but will increase $500 annually, making the second-year savings $3500, the third-year savings $4000, and so forth. For a 7% MARR, which device should the firm purchase?
A business invests $5000 and initially plans to achieve annual revenue of $1100/yr with $200/yr expenses (starting at the end of ar 1) for ten years. No market value if used for ten years. 1.If at the end of the sixth year, instead, the investment is sold for $1000, calculate the PW, FW and AW for a BTCF MARR of 12%. Is the investment a good one if used this way? Why?
A trust fund is to be established for providing the costs associated with a small engineering laboratory for the Engineering College. The following costs are required for the engineering laboratory: (1) The construction cost is$1,500,000and the initial equipment cost is$900,000; (2) The annual laboratory operating cost is$250,000for the first 3 years and$200,000thereafter; (3) The cost of equipment replacement is$350,000every 6 years, beginning 6 years from now. How much money is required in the trust fund now to build the engineering laboratory and maintain its perpetual operation and equipment replacement? The interest rate is 8%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
Company B has a P5M loan for a new security system it just bought. The annual payment is P444,000 and the interest rate is 8% per year for 30 years. Your company decides that it can afford to pay P500,000 per year. After how many payments (years) will the loan be paid off? a. 18.78 yrs b. 15.67 yrs c. 20.44 yrs d. 25.76 yrs
Engineering Economy Calculate the Present Worth. Don't use Excel You bought a new car which you intend to use as a public utility vehicle for P950,000. The expected life of the car is ten (10) years for its intended use. Your driver and you agreed that for the first five (5) years , your “boundary” is P1,500.00 per day and P1,000.00 per day for the rest of its economic life. You also expected a repair and maintenance costs of P30,000 every six (6) months from year one (1) to five (5) and P50,000 from year six (6) to ten (10). At the end of 10 years you can sell the car for P100,000. If your MARR on invested capital is 15% every (6) months, determine whether this is a good investment. Use the Annual Worth , Present Worth , or the Future Worth method in your solution. Indicate all other assumptions you use in your analysis.
Chambers Company has just gathered estimates forconducting a break-even analysis for a new product.Variable costs are $7 a unit. The additional plant willcost $48,000. The new product will be charged $18,000a year for its share of general overhead. Advertisingexpenditures will be $80,000, and $55,000 will be spenton distribution. If the product sells for $12, what is thebreak even point in units? What is the break even pointin dollar sales volume?
A project your firm is considering for implementation has these estimated costs and revenues: an investment cost of $58,548, maintenance costs that start at $5,000 at end-of-year (FOY) one and increase by $1,000 for each of the next four years, and then remain constant for the following five years; savings of $20,007 per year (EOY 1-10); and finally a resale value of $33,311 at EOY 10. If the project has a 10-year life and the firm's MARR is 10% per year, what is the present worth of the project?
A fabrication company engaged in production with a capacity of 150, 000 pieces per year. But, it is just operating at 70% of its full capacity. The company has an annual income of P 250, 000.00, annual fixed cost are P 50, 000.00 and variable costs are P 1.00 per unit. How many productions of parts must be produced for break-even point? Given: Required: Solution: refer to this textbook: https://drive.google.com/file/d/1h4ra80IE8IRtYyja16iK6TtjCrTDi73j/view?usp=sharing
1. The Present Worth Method A project your firm is considering for implementation has these estimated costs and revenues: an investment cost of $50,000; maintenance costs that start at $5,000 at the end of year (EOY) 1 and increase by $1,000 for each of the next 4 years, and then remain constant for the following 5 years; savings of $20,000 per year (EOY 1–10); and finally a resale value of $35,000 at the EOY 10. If the project has a 10-year life and the firm’s MARR is 10% per year, what is the present worth of the project? Is it a sound investment opportunity?
The Cornballer, invented by George Bluth in the mid-1970s, is a device used to make cornballs. Itsold for $29.95. Suppose that 10,000 Cornballers were sold in 1981; 11,000 in 1982; and salesincreasing by 10% each year until it was last sold in 1990 (when it was made illegal). Assume aninterest rate of 12% per year. Assume sales were made at EOY. What was the worth of these cashflows in 1980? Show in standard factor notation and show the cash flow diagrams.