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An equipment was purchased now at P10,000,000.00 prevailing interest rate is 10% per year. Solve the following cases capitalized cost:
- Solve for case 2 if the machine on item 1.1 is to be replaced every end of 10 years at 10% worth of money. Salvage cost is zero.
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- 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?A small strip-mining coal company is trying to decide whether it should purchase or lease a new clamshell. If purchased, the “shell” will cost $140,000 and is expected to have a $45,000 salvage value after 6 years. Alternatively, the company can lease a clamshell for only $14,000 per year, but the lease payment will have to be made at the beginning of each year. If the clamshell is purchased, it will be leased to other strip-mining companies whenever possible, an activity that is expected to yield revenues of $10,000 per year. If the company’s MARR is 12% per year, should the clamshell be purchased or leased on the basis of a future worth analysis? Assume the annual M&O cost is the same for both options. The future worth when purchased is $ . The future worth when leased is $ .A mining company is performing an economic analysis between two equipment. The initial price for Equipment is $200,000 and has a service life of 1 years with operating and maintenance costs of $8000 per year. If the equipment can generate gross annual revenues of $41000 and the company uses an annual MARR of 6%, calculate the equipment's discounted payback period
- 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).Detailed and legible penmanship please. Thank you An oil company is being offered a special coating for the gasoline underground tank installation in its service stations which will increase the life of the tank from the usual 10 years to 15 years. The cost of the special coating will increase the cost of the 40,000-tank to 58,000. Cost of installation for either of the tanks is P24,000. If the salvage value for both is zero, and interest rate is 26%, would you recommend the use of the special coating? Use the Present Worth Cost method to prove your conclusion.A company in Batangas is planning to buy a new gantry crane that has a capacity of 50 tons. In the market, there are four available cranes offered by different well-known companies. The first equipment is a portable/mobile gantry crane with a cost of P2,400,000 and an installation cost of P50,000. During its life of 5 years, the cost of power and labor is P130,000 and P280,000 respectively. Maintenance should be followed as well and must be done on its scheduled program. The cost of maintenance per year is P116,000. The second equipment is a double girder gantry crane with a cost of P3,000,000 and an installation cost of P40,000. During its life of 5 years. the cost of power and labor is P136,000 and P190,000 respectively. The cost of maintenance per year is P93.000. The third equipment is an electric trolley gantry crane with a cost of P4.960,000 and an installation cost of P55,000. During its life of 5 years, the cost of power and labor is P240,000 and P130,000 respectively. The cost…
- A company in Batangas is planning to buy a new gantry crane that has a capacity of 50 tons. In the market, there are four available cranes offered by different well-known companies. The first equipment is a portable/mobile gantry crane with a cost of P2,400,000 and an installation cost of P50,000. During its life of 5 years, the cost of power and labor is P130,000 and P280,000 respectively. Maintenance should be followed as well and must be done on its scheduled program. The cost of maintenance per year is P116,000. The second equipment is a double girder gantry crane with a cost of P3,000,000 and an installation cost of P40,000. During its life of 5 years. the cost of power and labor is P136,000 and P190,000 respectively. The cost of maintenance per year is P93.000. The third equipment is an electric trolley gantry crane with a cost of P4.960,000 and an installation cost of P55,000. During its life of 5 years, the cost of power and labor is P240,000 and P130,000 respectively. The cost…The investment of design 2 is supposed to be $140600. The MARR to be used in the problem is 20%.NEV, Inc. wants to evaluate two new methods that will improve their productivity. Both alternatives have 22 years of service life and NEV uses MARR of 13%. Alternative A has a first cost of $3,315,000 Maintenance cost will start end of year three due to an incentive in the contract with the manufacture that will give free maintenance in the first 2 years. The maintenance cost at end of year three is $42,000 and will increase by $2,700 starting end of year four and continue to increase with the same value thereafter till the end of its service life. A three-times major repair will occur. The first one is at end of year 8 that will cost $56,000, the second one is at end of year 13 and will cost $32,000 and the third and last major repair is $27,500 at end of year 19. The expected revenues from this alternative are $572,000 per year starting end of year 1 and this option will have a salvage value of $840,000 at the end of its service life. Alternative B has a first cost of $2,570,000 and…
- A factory manager bought a rare machine for $10 million. of the machine The sales value at the end of the first year will be $3 million and the machine will be sold by antique dealers. It is estimated to be valued at $500,000 due to the Initial cost of maintenance Expected to be $300,000 in 3 years and double each year thereafter. In this way, the maintenance cost of the 4th year is $600,000, the maintenance cost of the 5th year is $1,200,000, etc. will be. Calculate the economic life of this machine based on the Minimum Attractive Efficiency Ratio of 15%.Mr. Garcia sold his machine for P20,000 after using it for 6 years. He bought a new machine worth 75,000 with an expected life of 12 years and a salvage value of 2,000. The operating cost is P5,500 per year. The old machine which he bought for P50,000 when new will be useful for 10 years and a junk value of 1,000 but because of appropriate maintenance, it will be useful for another 5 years, no salvage value, with an annual operating cost of twice the new one. If money is worth 12%, was the engineer justified in selling the old machine? Use the ROR method. Show complete solution. Thank youYou work for Midstates Solar Power. A manager asked you to analyze the following two machines. Machine Semi has a first cost of $50, 000 and an operating cost of $15, 000 in year 1, increasing by $1500 every two years through year 6, after which time it will have a salvage value of $10, 000. Machine Auto has a first cost of $50, 000 and an operating cost of $20, 000 in year 1, increasing by 5% per year through year 6, after which time it will have a salvage value of $15, 000. Utilize an interest rate of 12% per year to determine both estimates. a) Which machine will have the lower capital recovery cost? b) Which machine will have the lower equivalent annual total cost?