Given the following marginal cost values for a given asset, determine the equivalent uniform annual cost for the first three years and identify the minimum cost life. Use an interest rate of 10%. Year Marginal
Q: At the Cournot equilibrium, fırms have no incentive to change their output levels because (select…
A: Cournot equilibrium is achieved when the firm decides its quantity on the basis of the strategy…
Q: Author claims, “The pandemic was unexpected shock. Climate change and climate policy are known…
A: The aggregate demand curve shows the inverse relationship between the price level and the total…
Q: Home's demand curve for wheat is D = 100- 20P. Its supply curve is S= 20 + 20P. 2. Now add…
A: A government's policy of not discriminating against imports or interfering with exports by imposing…
Q: (? Market for Clothing in Cambodia Domestic Demand Consumer Surplus Domestic Supply New World Price…
A: consumer surplus is a proportion of consumer government assistance and is characterized as the…
Q: What is the future value of $3,000 saved for 6 years at 4% interest
A: FV = PV ( 1 + r )^t FV = Future value PV = present value i = interest rate compounded annually t =…
Q: An award is being established, and t wil pay $11,200 every three years, with the fst instalment…
A: C = 11,200 r = 3%
Q: Discuss in detail the limitations of the IS-LM model. Why is it unrealistic for todays economies
A: The IS-LM Model stands as, IS - Investment-savings, LM - liquidity-money supply. This IS-LM Model…
Q: In the Simple Keynesian Macroeconomic Model, which of the following will determine the level of…
A: Answer is given below
Q: You buy a watch that costs $45.50. The tax on the watch is 7.5%. What is the final cost?
A: Given: The cost of the watch is = $45.50 The tax on the watch is = 7.5% To Find: The final cost:
Q: 4. The marginal social cost (MSC) of an electricity generating plant that uses coal is estimated by…
A: Answer in step 2
Q: Explain the Friedmanian model of NAIRU
A: NAIRU stands for Non Accelerating Inflation rate of Unemployment.
Q: Baed on best buy company assessment of the present value of your organization: what it would be…
A: Strategy planning: Strategic planning is a organization process to defining its strategy on various…
Q: discussing factors of production. How would you determine the demand for a factor of production?…
A: Factors of production:- a) Capital. b) Land. c) Labor. a) The demand for a production factors is…
Q: Your company is going to invest in a new machine that expects to produce $50,0oo in new profits each…
A: Given information: Profit for 3 years = $50000 each year First-year investment for machine = $50000…
Q: A firm has a production function QL,K=100L0.4K0.6 with a cost function CL,K=5L+30K. What is the…
A: Q(L,K)=100L0.4K0.6 C(L,K)=5L+30K w=5 r=30 Q=1000 MPL=dQ/dL=0.4(100)L-0.6K0.6 MPL=40L-0.6K0.6…
Q: In the Simple Keynesian Macroeconomic Model, which of the following will determine the level of…
A: Answer is given below
Q: 2. Given the following information: U=XY; Px= 5; Py= 10; I = 200, a. mathematically_show the (i)…
A: * SOLUTION :- (6e) Given that , U = XY Px = 5 Py =10 I =200
Q: Which of the following statements is true? a. In a finitely repeated prisoner’s dilemma, players…
A: Nash Equilibrium: A Nash equilibrium refers to one in which no one can get better without making…
Q: Explanation it correctly and in detail. Q)As long as there is free entry into a market:- A.…
A: If there is free entry and exit in the market, such markets generally have high competition due to…
Q: ompare two methods of monopoly regulation.
A: To safeguard consumers' interests, the government may desire to regulate monopolies.Monopolies, for…
Q: Consider two internet service providers: ISP West and ISP East, offering internet access to a small…
A: * SOLUTION :- (10) Given that , The price elasticity of 1SP west = -1.25 The price elasticity…
Q: Suppose the demand for oil is P=122Q 0.20 There are two oil producers who do not cooperate.…
A: Profit = Total Revenues - (Explicit Costs + Implicit Costs)
Q: 2. Consider the utility function of individual A given by Ua (X,Y) = X".5ya.s in answering the %3D…
A: utility means the satisfaction consumer derives from the consumption . it is measured in terms of…
Q: The price-supply and price-demand equations of a certain product are given by p = S(x) = 15 + 0.1x…
A:
Q: year. The transaction was denominated in Euros. The exchange rate at the time Was US Euro. However,…
A: Foreign Currency exchange can be presented in either direct quote or indirect quote. A direct…
Q: Explain how the relationship between elasticity of demand for the product and labor would affect…
A: The elasticity of labour demand measures how responsive labour demand is to changes in wage rates.…
Q: [Basic static analysis of trade] Construct a simple model of the (wholesale) market for wheat…
A: The process of purchasing and selling items in big numbers and so at lower rates, mainly to…
Q: Q.2 When transactions costs are sufficiently high, it may be more efficient to supply the good…
A: The term "publicly supplied goods" refers to goods that have a high marginal cost of supplying…
Q: An award is being established, and t will pay $11,200 every three years, with the fst instalment…
A: C = 11,200, r = 3%
Q: Read the following scenario. Imagine a market where there is perfect competition between two or…
A: *Answer:
Q: In which market structure does Johnson Electronics (Pty) Ltd operate? Provide a reason for your…
A: "Market structure depicts how firms are differentiated from each other based o the type of…
Q: Question 11 Refer to Figure 6-1 What price will Dough! charge to maximize profits? (Write just the…
A: "For a monopoly, profits are maximized at a point where marginal revenue curve (MR) intersects the…
Q: Assume equations 1 and 2 below were estimated from the data gathered that will represent the demand…
A: Given information Qdx=65000-11.25Px+15Py-3.75I+7.5A--(1) Qsx=7500+14.25Px-15Pz-3.75C---(2) equation…
Q: A firm has the following average variable cost equation. AVC = 60 – 15Q+ Q? And the average total…
A: Average total cost is the sum of average variable cost and average fixed cost i.e., ATC = AVC + AFC…
Q: A company is considering the purchase of new equipment for $93,000. The projected annual net cash…
A: Net Present value is a tool which is used for calculating the current total value of a future assets…
Q: The Canadian economy produces a vast array of goods and services, trom cars to cannabis Suppose that…
A: In an economy, GDP is the sum of the components of aggregate demand that are consumption, net…
Q: Instructions: Analyze and answer the following questions A US Company plans to sell farm equipment…
A: Many factors like legal, economic, political, and cultural factors can affect the business condition…
Q: for product X. Eq. 1 Eq. 2 Qdx = 65,000 – 11.25P; + 15P, – 3.75/ +7.5A Qsx = 7,500 + 14.25PX – 15P,…
A: We are going to solve these questions using partic derivative techniques
Q: Which of the following is a method a incumbent's can use to make limit pricing a credible threat?…
A: When talking about the competition at the marketplace, incumbents are the sellers who tries to get…
Q: As a part of their benefits program, Lonny's Grocery Store offers its employees a PTO package that…
A: Disclaimer: “Since you have asked multiple questions, we will solve the first question for you. If…
Q: The marginal product of labor is the increase in total product from a Select one: a. one dollar…
A: "Total product refers to the total output produced by inputs involved in the production process."
Q: Economics The presence of co-insurance has the following effect on price elasticity of demand:…
A: When talking about co-insurance, it can be said that it is the amount of money paid by an insured…
Q: Starting with a short run and long run equilibrium, assume a war breaks out, then," a.government…
A: Short-run equilibrium occurs at the intersection point of the short-run aggregate supply (SRAS) and…
Q: Amagine you are the manager of a car dealership and you are trying to create an economic model to…
A: An economic model creates a similar situation for a firm in accordance to real life through which…
Q: Suppose two consumers, Jack and Suzy, have identical utility functions defined for pencils (P) and…
A:
Q: Please perform the quantitative analysis with the above variables. 1.0 Introduction 1.1 Objectives…
A: Sales operations are a set of actions and processes that assist a sales organization run more…
Q: a. What will be the total change in money supply as the result of this increase in deposits? Explain…
A: The concept of money supply states that when money is deposited in the bank, after keeping the…
Q: 19. Odette has a base monthly salary of S1.500 and eams a 5% commission on all sales she makes at…
A: One of the most important incentives given by the firms to their employees are incentives on Sales…
Q: Your pharmaceutical firm is seeking to open up new international markets by partnering with various…
A: The market price is the ongoing cost at which a resource or administration can be traded. The market…
Q: The government is considering passing a regulation that will prohibit the use of a certain chemical…
A: Given, P1 = $5 Q1 = 6 million units P2 = $6 Q2 = 4 million units slope of demand curve, m=change in…
Given the following marginal cost values for a given asset, determine the equivalent uniform annual cost for the first three years and identify the minimum cost life. Use an interest rate of 10%.
Year |
Marginal cost of existing asset |
1 |
$3,500 |
2 |
$3,150 |
3 |
$3,400 |
Learn your way
Includes step-by-step video
Step by step
Solved in 2 steps
- A machine costs $19,310 and is expected to have a scrap value of $2,991 whenever it is retired. Operating and Maintenance costs are $1,047 for the first year and expected to increase by $1,751 thereafter. If the MARR is 12%, determine the minimum equivalent uniform annual cost associated with the optimal economic life of the machine. The service life of this machine is 5 years. Note: round your answer to two decimal places, and do not include spaces, currency signs,Gordon Inc. has a number of copiers that were bought four years ago for $20,000. Currently maintenance costs $2,000 a year, but the maintenance agreement expires at the end of two years and thereafter the annual maintenance charge will rise to $8,000. The machines have a current resale value of $8,000, but at the end of year 2 their value will have fallen to $3,500. By the end of year 6 the machines will be valueless and would be scrapped. Gordon is considering replacing the copiers with new machines that would do essentially the same job. These machines cost $25,000, and the company can take out an eight-year maintenance contract for $1,000 a year. The machines have no value by the end of the eight years and would be scrapped. Both machines are depreciated by using seven-year MACRS, and the tax rate is 35 percent. Assume for simplicity that the inflation rate is zero. The real cost of capital is 7 percent. When should Gordon replace its copiers, now, the end of year 2, or the end of…A new machine will cost $200,000. Its maximum useful life is 8 years. The expected market value (MV) of the machine at the end of year 1 is $100,000, and it is expected to decline by $15,000 each year afterwards. The annual operating cost (AOC) is projected to be $75,000 during the first year of operation, and it is expected to rise by 15% every year afterwards. Assuming 11% minimum attractive rate of return, calculate the economic service life of the machine. Your calculations need to include a table with the following columns: Year, MV, AOC, Capital Recovery, Annual Worth (AW) of AOC, and Total AW. Illustrate your analysis with a properly labeled chart, featuring the number of years of service on the horizontal axis, and capital recovery, annual worth of the AOC, and total annual worth on the vertical axis (click to format the vertical axis and check the box “Values in reverse order” so that the axis displays rising cost as movement up). Please provide a written statement clearly…
- The following pair of assets differ only in the MARR. The problem asks you to determine the effect of this difference on the economic life and to explain the result. All assets decline in value by 20 percent of current value each year. Installation costs are zero for all assets. Further data concerning the four pairs of assets are given in the table that follows. Asset First Cost Initial Operating Cost Rate of Operating Cost Increase MARR A $120,000 $30,000 12.5% 5% B $120,000 $30,000 12.5% 25% a. Determine the economic lives for assets A and B. The economic life of asset A is (enter your response here) years, and the economic life of asset B is (enter your response here) years. b. Create a diagram showing the EAC(capital), the EAC(operating), and the EAC(total) for assets A and B. c. Explain the difference in economic life between A and B.In conducting a replacement study of assets with different lives, can the annual worth values over the asset’s own life cycle be used in the comparison,if the study period is (a) unlimited, (b) limited and the study period is not an even multiple of asset lives, and (c) limited wherein the period is a multiple of asset lives? Explain your answers.A small manufacturing firm is considering the purchase of a new machine to modernize one of its current production lines. Two types of machines are available on the market. The lives of Machine A and Machine B are four years and six years, respectively, but the firm does not expect to need the service of either machine for more than five years. The machines have the following expected receipts and disbursements: After four years of use, the salvage value for Machine B will be $1,000. The firm always has another option: to lease a machine at $3,000 per year, fully maintained by the leasing company. The lease payment will be made at the beginning of each year.(a) How many decision alternatives are there?(b) Which decision appears to be the best at i = 10%?
- A machine that has been used for 8 years has a market value of $2,500 now, which decreases by $100 each year for the next 5 years. Maintenance costs this year are $5k, and for the next 5 years they are estimated at $6k, $7k, $8k and $9k. Determine the marginal cost of extending the service for two years if the MARR is 12%. Answer the questions: a) How much is the loss in market value in year 2? b) How much is the loss in interest in year 2? c) What is the Marginal Cost in year 2? d) If the machine's minimum EUAC is $5,500, when, in years, should the machine be replaced?An industrial forklift has been in service for several years and management plans to replace it. For the respective study, a planning horizon of five years will be used. The old forklift (defender) has a current market value of $1,500. If the defender were to be retained, it is anticipated that it would generate annual O&M costs of $7,300. It would have a market value of zero at the end of five additional years of service. The new forklift (challenger) will cost $10,000 and will have operating and maintenance costs totaling $5,100. At the end of the planning horizon it will have a market value of $2,500. Determine the preferable alternative by comparing the present value and the minimum acceptable rate of return (before taxes) of 20% per year.Your company is considering a new computer system with an initial cost of $1 million. When implemented, the system will save $300,000 per year in inventory and administration costs. The system has a service life of five years and is classified in the three-year MACRS category. At the end of the fifth year, its residual value was estimated at $50,000. The system has no impact on net working capital. The marginal tax rate is 40 per cent. The required rate of return is 8 per cent.
- Greenleaf Company is considering the purchase of a new set of air-electric quill units to replace an obsolete machine. The current machine has a market value of zero; however, it is in good working order, and it will last physically for at least an additional five years. The new quill units will perform the operation with so much more efficiency that the firm's engineers estimate that labor, material, and other direct costs will be reduced by $3,000 a year if the units are installed. The new set of quill units costs $10,000 delivered and installed, and its economic life is estimated to be five years with zero salvage value. The firm's MARR is 10%.(a) What is the investment required to keep the old machine?(b) Compute the cash flow to use in the analysis of each option.(c) If the firm uses the internal-rate-of-return criterion, would the analysis indicate that the firm should buy the new machine?A company needs to acquire a machine to increase its production. To do so, you will need to make an initial investment of $150,000. Furthermore, the use of the machine will result in annual operating and maintenance costs of around 2,500.00, for a useful life of 10 years and a residual value of %30,000. At the end of 4 and 8 years, it requires revisions that cost $20,000 and $10,000 respectively. At the end of the fifth year, it must undergo a general renovation at the cost of .$45,000. Under these conditions, what is the Uniform Equivalent Annual Cost generated by the company's acquisition of the machine? Consider an attractive minimum rate of return of 10% per year.A machine was bought 10 years ago for 30,000 it could be sold today for 10,000 next year for 8,000 in two years for 5,000 and in 3 years for 3,000. The maintenance costs will be 25,000 in year 1, 3,000 in year 2 and 5,000 in year 3 What are the marginal costs of the machine during the first three years after the interest rate is 10% a company buys a machine for $ 10,000 with a life of 5 years, with no salvage value and no annual costs, no salvage value and no annual maintenance costs the depreciable machine with the straight-line method generates profits of 3,000 in the first year and remain constant in purchasing power for the rest of the life of the project. The company pays contributions at 40% and the interest rate is 5% suppose that it can make alternative investments that yield 8% in current dollars, which is the present value of the cash flow for the second year net of contributions.