A steel company is trying to decide between two industrial type cranes. Crane A and Crane B are mutually exclusive, and the economics estimates for each are shown Crane A $15,000 $7,000 $4,000 5 Capital investment Annual expenses Salvage value Life, in years 6 F C 3 Crane B $35.000 $5,000 0 20 If the MARR is 15% 1-The present worth of the Crane A Capital investment and Annual expenses over 5 years is 2-The present worth of Crane B over 20 years is 5 # 3-The present worth of Crane A over 20 years is 5 4-The recommended alternative is & Moving to another question will save this response. 65,295.83 -39,765.3 -38,465.4 -14,085.8 Crane A 105,16.02 -53,104.2 -66,296.5 Crane B 28,0678 -114,336.1 -55,101.5 BLAGET

A steel company is trying to decide between two industrial type cranes. Crane A and Crane B are mutually exclusive, and the economics estimates for each are shown Crane A $15,000 $7,000 $4,000 5 Capital investment Annual expenses Salvage value Life, in years 6 F C 3 Crane B $35.000 $5,000 0 20 If the MARR is 15% 1-The present worth of the Crane A Capital investment and Annual expenses over 5 years is 2-The present worth of Crane B over 20 years is 5 # 3-The present worth of Crane A over 20 years is 5 4-The recommended alternative is & Moving to another question will save this response. 65,295.83 -39,765.3 -38,465.4 -14,085.8 Crane A 105,16.02 -53,104.2 -66,296.5 Crane B 28,0678 -114,336.1 -55,101.5 BLAGET

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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.
A businessman is considering the purchase of a machine that is expected to be obsolete in 5years. The machine is worthP100,000. The prevailing rate of interest is 15%. His estimate of the annual gross incomes fromthe use of the machine isas follows:Year Income1 20,0002 25,0003 35,0004 30,0005 28,000Total = P138 999Should the businessman purchase the machine?
1. A machine cost P10M and will have scrap value of 10% of the first cost at theend of 10 years. If money is worth 12%. Find the annual investment and thecapitalized cost of the machine.
A five-year project has an initial fixed asset investment of $613,600, an initial net working capital investment of $22,200. The project will have an annual operating cash flow (OCF) of (-$76,540). The fixed asset is fully depreciated over the life of the project and has no salvage value. The net working capital will be recovered when the project ends. The required return is 11.7 percent. What is the project's equivalent annual cost, or EAC? O-$248,052.76 O-$182,309.18 O-$147,884.01 O $242,212.22
A firm is considering purchasing equipment to manufacture a new product. The equipment will cost $3M, and expected net cash inflowsare $0.35M indefinitely. If market demand for theproduct is low, then over the next five years thefirm will have the option of discarding the equipment on a secondary market for $2.2M. Assume thatMARR = 12%, s = 50%, and r = 6%. What isthe value of this investment opportunity for the firm?
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urgent A firm can purchase a centrifugal separator (5-year MACRS property) for $17,000. The estimated salvage value is $4,000 after a useful life of six years. Operating and maintenance (O&M) costs for the first year are expected to be$1,700. These O&M costs are projected to increase by $500 per year each year thereafter. The income tax rate is 25% and the MARR is 13% after taxes. What must the uniform annual benefits be for the purchase of the centrifugal separator to be economical on an after-tax basis? The uniform annual benefits should be........... (Round to the nearest dollar.)
! Show Full Solution ! *using PERPETUITY formula only *use given data below Question: What amount of money invested today at 15% interest can provide the following scholarships: P30,000 at the end of each year for 6 years; P40,000 for the next 6 years and P50,000 thereafter. pls provide clear solution.
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A Veterans Administration (VA) hospital isto decide which type of boiler fuel system will mostefficiently provide the required steam energy outputfor heating, laundry, and sterilization purposes. Thecurrent boilers were installed in the early 1950s andare now obsolete. Much of the auxiliary equipmentis also old and in need of repair. Because of thesegeneral conditions, an engineering recommendationwas made to replace the entire plant with a new boilerplant building that would house modern equipment.The cost of demolishing the old boiler plant wouldbe almost a complete loss, as the salvage value of thescrap steel and used brick was estimated to be onlyabout $1,000. The VA hospital’s engineer finallyselected two alternative proposals as being worthyof more intensive analysis. The hospital’s annualenergy requirement, measured in terms of steam output, is approximately 145,000,000 pounds of steam.As a rule of thumb for analysis, 1 pound of steam isapproximately 1,000 Btu, and 1 cubic foot…
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uppose that you purchased a HVAC system five years ago for $75, 000. The O&Mcosts are $15, 000 this year and are expected to increase by $1, 000 each year for the next five yearsthen remain the same for the following years.The current salvage value of the system is $15, 000; salvage value after one year is estimated tobe $12, 000; after two years, $11, 000; after three years, $10, 000; after four years, $9, 000; and so on.A new industrial HVAC system is available for purchase at a price of $95, 000, including instal-lation. The market value of the new system will decrease at a rate of 15% each year. The O&Mcosts are expected to be $1, 000 in the first year, and will increase at a rate of 20% each year. Themaximum service life of the new system is 10 years. Assume that your company uses an interestrate of 10% for all project evaluations.(a) Find the remaining economic life of the currently owned asset.(b) What is the economic service life of the new system?(c) Use the…