Step by step solution for this question Concurris Prototyping is committed to using the newest and finest equipment in its labs. Accordingly, Wilma, a senior engineer, hasrecommended that a 2-year-old piece of precision measurement equipment be replaced immediately. She believes it can bedemonstrated that the proposed equipment is economically advantageous at a 15% -per year return and a planning horizon of 5 years.Perform the replacement analysis using the annual worth method, a 5-year study period, and the estimates below. Was Wilma correct?EquipmentCurrentProposedOriginal purchase price, $Current market value, $-30,000-42,00015,000Remaining life, years515Estimated value in 5 years, $7,00010,0005,000-3,000Salvage value after 15 years, $AOC, $ per yearThe AW of the defender is $-[Wilma (Click to select) correct.-14,000and the AW of the challenger is $-|

Concurris Prototyping is committed to using the newest and finest equipment in its labs.…

Answered: Concurris Prototyping is committed to…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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oncurris Prototyping is committed to using the newest and finest equipment in its labs. Accordingly, Wilma, a senior engineer, has recommended that a 2 -year-old piece of precision measurement equipment be replaced immediately. She believes it can be demonstrated that the proposed equipment is economically advantageous at a 15%-per year return and a planning horizon of 5 years. Perform the replacement analysis using the annual worth method, a 5 -year study period, and the estimates below. Was Wilma correct? \table[[Equipment,Current,Proposed],[Original purchase price, $,-30,000,-42,000
A company that manufactures magnetic flow meters expects to undertake a project that will have the cash flows estimated. At an interest rate of 10% per year, what is the equivalent annual cost of the project? First cost, $ −800,000 Equipment replacement cost in year 2, $ −300,000 Annual operating cost, $/year −950,000 Salvage value, $ 250,000 Life, years 4
A company is considering two alternatives for manufacturing a certain part. Method R will have a first cost of $40,000, and annual operating cost of $25,000, and a $10,000 salvage value after its five-year life. Method S will have an initial cost of $100,00, an annual operating cost of $15,000 and a $12,000 salvage value after its 10-year life. At an interest rate of 12% per yr, the present worth values of the alternatives are closest to; A. PWR = $ 124,446 PWR= $180,889 B. PWR = $ 124,446 PWR= $147,263 (ANSWER) C. PWR= $195,057 PWS= $180,886 D. PWR= $195,057 PWS=$147,263
An investment broker that Ava trusts recommended that she purchase a $50,0 00, 15-year municipal bond that generates a dividend of 4% per year payable quarterly. She will pay a discounted amount of $45,000 now for the bond. In general, Ava hopes to make 8 % per year compounded quarterly on her investments. Using the PW value, determine if this is a financially advantageous investment for her. Solve with factors. The present worth is
Ken Allen, capital budgeting analyst for Bally Gears, Inc., has been asked to evaluate a proposal. The manager of the automotive division believes that replacing therobotics used on the heavy truck gear line will produce total benefits of $516,000 (in today's dollars) over the next 5 years. The existing robotics would produce benefits of $387,000 (also in today's dollars) over that same timeperiod. An initial cash investment of $206,400 would be required to install the new equipment. The manager estimates that the existing robotics can be sold for $72,000. Show how Ken will apply marginal cost-benefit analysistechniques to determine the following:a. The marginal benefits of the proposed new robotics.b. The marginal cost of the proposed new roboticsc. The net benefit of the proposed new robotics.
A road resurfacing project costs $250,000, lasts 5 years and saves $150,000 annually in patching costs. MARR is 12%. Determine the annual worth (in $)
Profit and loss (in $1000 units) associated with the sale of a vision-guided machine tool loading system and the resulting NCF amounts are recorded. (a) Use sign-change rules to determine the possible number of i* values. (b) Find all i* values between 0 and 100%. (c) If the required MARR for the company is 15% per year, how small can the gradient be for years 3 through 6? Year Cash Flow, $ 0 −5,000 1 −10,100 2 4,500 3 6,500 4 8,500 5 10,500 6 12,500
Consider two air-conditioning systems with the estimates below. (a) Use AW analysis to determine the sensitivity of the economic decision to MARR values of 4%, 6%, and 8% per year. (b) Develop the spreadsheet functions that will display the six AW values. System 1 2 First cost, $ −10,000 −17,000 AOC, $ per year −600 −150 Salvage value, $ −100 −300 New compressor and motor cost at midlife, $ −1,750 −3,000 Life, years 8 12
Three neighboring counties in a state have agreed to pool tax resources already designated for county-maintained bridge refurbishment. At a recent meeting, the county engineers estimated that a total of $500,000 will be deposited at the end of next year into an account for the repair of old and safety-questionable bridges throughout the three-county area. Further, they estimate that the deposits will increase by $100,000 per year for 9 years thereafter, and then cease. At an interest rate of 5% per year, find the equivalent annual worth (AW) of the repair costs. a.$ 536,670 b.$ 909,910 c.$ 909,190 d.$ 536,760
Three neighboring counties in a state have agreed to pool tax resources already designated for county-maintained bridge refurbishment. At a recent meeting, the county engineers estimated that a total of $500,000 will be deposited at the end of next year into an account for the repair of old and safety-questionable bridges throughout the three-county area. Further, they estimate that the deposits will increase by $100,000 per year for 9 years thereafter, and then cease. At an interest rate of 5% per year, find the equivalent present worth (PW) of the repair costs. a.$ 7,206,050 b.$ 7,026,050 c.$3,815,270 d.$ 8,315,270
Sakura Energy, a Malaysian brent oil trading company, would like to export 100,000 barrels of brent oil with the current price of USD50 per barrel to an importer in Taiwan.Determine how much proceeds (in RM) will be received by Sakura Energy.
A company that manufactures magnetic flow meters expects to undertake a project that will have the cash flows estimated. First cost, $ −840,000 Equipment replacement cost in year 2, $ −300,000 Annual operating cost, $/year −890,000 Salvage value, $ 250,000 Life, years 4 At an interest rate of 10% per year, what is the equivalent annual cost of the project? Find the AW value using tabulated factors. The equivalent annual cost of the project is $− .

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