Consider a palletizer at a bottling plant that has a first cost of $150,000, operating and maintenance costs of $17,500 per year, and an estimated net salvage value of $25,000 at the end of thirty years. Assume an interest rate of 8%. What is the future equivalent cost of the investment if the planning horizon is thirty years?
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Consider a palletizer at a bottling plant that has a first cost of $150,000, operating and maintenance costs of $17,500 per year, and an estimated net salvage value of $25,000 at the end of thirty years. Assume an interest rate of 8%. What is the future equivalent cost of the investment if the planning horizon is thirty years?
$3,517,000
$3,371,000
$3,623,000
$3,980,000
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- You invest in a piece of equipment costing $30,000. The equipment will be used for two years, at the end of which time the salvage value of the machine is expected to be $10,000. The machine will be used for 5,000 hours during the first year and 8,000 hours during the second year. The expected annual net savings in operating costs will be $25,000 during the first year and $40,000 during the second year. If your interest rate is 10%, what would be the equivalent net savings per machine-hour? Solved in Excel is perfered!You are considering a luxury apartment building project that requires an investment of $14,500,000. The building has 60 units. You expect the maintenance cost for the apartment building to be $450,000 the first year and $490,000 the second year. The maintenance cost will continue to increase by $40,000 in subsequent years. The cost to hire a manager for the building is estimated to be $100,000 per year. After five years of operation, the apartment building can be sold for $18,000,000. What is the annual rent per apartment unit that will provide a return on investment of 17%? Assume that the building will remain fully occupied during its five years of operation. The annual rent per apartment unit should be $ ______thousand. (Round to one decimal place.).Consider a palletizer at a bottling plant that has a first cost of $150,000, operating and maintenance costs of $17,500 per year, and an estimated net salvage value of $25,000 at the end of 30 years. Assume an interest rate of 8%. What is the annual equivalent cost of the investment if the planning horizon is 30 years? a. $29,760 b. $30,600 c. $31,980 d. $35,130.
- You invest in a piece of equipment costing $40,000. The equipment will be used for two years, and it will be worth $15,000 at the end of two years. The machine will be used for 4,000 hours during the first year and 6,000 hours during the second year. The expected savings associated with the use of the piece of equipment will be $28,000 during the first year and $40,000 during the second year. Your interest rate is 10%.(a) What is the capital recovery cost?(b) What is the annual equivalent worth?(c) What is net savings generated per machine-hour?If a project costs $90,000 and is expected to return $24,500 annually, how long does it take to recover the initial investment? What would be the discounted payback period at i=14%? Assume that the cash flows occur continuously throughout the year. The payback period is___________years. (Round to one decimal place.)A machine is under consideration for investment. The cost of the machine is 28,000. Each year it operates the machine generate a savings of P16,000. Given an effective annual interest rate of 16%. What is the discounted payback period in years, on the investment in the machine? Show complete solution.
- Assume a machine that has a useful life of only one year costs $2,000. Assume, also, that net of such operating costs as power, taxes, and so forth, the additional revenue from the output of this machine is expected to be $2,800. The expected rate of return on this machine is 40 percent. 80 percent. 30 percent. 7 percent.You are considering purchasing a new punch press machine. This machine will have an estimated service life of 10 years. The expected after-tax salvage value at the end of service life will be 10% of the purchase cost. Its annual after-tax operating cash flows are estimated to be $60,000. If you can purchase the machine at $308,758, what is the expected rate of return on this investment?(a) 12%(b) 13.6%(c) 15%(d) 17.2%Consider the following two mutually exclusive service projects with projectlives of three years and two years, respectively. (The mutually exclusive service projects will have identical revenues for each year of service.) The interest rate is known to be 12%. Net Cash Flow End of Year Project A Project B 0 -$1,000 -$800 1 -400 -200 2 -400 -200+0 3 -400+200 If the required service period is six years and both projects can be repeated with the given costs and better service projects are unavailable in the future, which project is better and why? Choose from the following options:(a) Select Project B because it will save you $344 in present worth over the required service period.(b) Select Project A because it will cost $1,818…
- A tire manufacturing plant is considering purchasing $14,000 worth of new tools for use on the production line. It is estimated that the new tools will reduce required labor by $3,000 each year. The payback period for the new tools is approximately Group of answer choices 5 years 6 years 5.13 years 4.67 yearsAnnual maintenance costs for a machine are P1,500 this year and are estimated to increase 10% each year every year. What is the present worth of the maintenance cost for six years? a) if i = 8%b) if i = 10%c) if i = 12%1. Two installations are being considered to provide for water storage in a chemical plant. A tank on a tower or a tank of equal capacity placed on a hill some distance from the plant. The cost of installing the tank and tower is estimated at P350,000. The cost of installing the tank on the hill, including the extra length of service lines, is estimated at P300,000. The hill installation will require an additional investment of P30,000 in pumping equipment whose life is estimated to be 15 years with a salvage value of P2,500. The life of the two installations is estimated to be 30 years. Annual cost of labor, electricity, and maintenance incident to the pumping equipment is estimated at P3,000. Taxes and insurance for both are 2.5% of the first cost. Money is worth 18% effective.Which alternative should be used? Write a brief interpretation of your answers. (USE PW and EUAC)