Ima Good-Student enrolls in ENGR 3202. She had considered purchasing a new vehicle but decides that she can buy a good used vehicle and invest the difference in the stock market. Ima sells her current vehicle for $5000 and buys a low-mileage vehicle for $15000 in cash, no financing needed. She also realizes that she needs to account for maintenance and operation costs. Those costs are estimated to be $2000 per year and increase by $100 per year. She will keep the vehicle for six years and sell it for an estimated $3000. If her MARR is 8%, what is the present value of this cash flow? O a. $-23000 O b. $-23400 O c. $-18000 O d.-$18400
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- ASAP PLZ An industrial plant bought a generator set for P125,000. Other expenses including instalment amounted to P35.000. The generator set is to have a life of 17 years with a salvage value at the end of life of P4,000. In what year did the book value of the generator set equal or almost equal to half of the cost of the equipment, use SYD method. (ENGINEERING ECONOMY)A young engineer is considering establishing his own company. An investment pfP500,000 will be required, which will be recovered in 15 ears. It is estimated that sales will be P800,000 per year and the operating expenses will be as follows: Materials P160.000 per year Labor P280.000 per vear Overhead P40.000 + 10% of sales per year Selling expenses P60,000 per year The engineer will give up his regular job paying P216,000 per year and devote full time to the operation of the business; this will result in decreasing labor cost by P40,000 per year, material cost by P28,000 per year, and overhead cost by P32,000 per year. If the engineer expects to earn at least 20% of his capital, should he invest? (Use ROR method for your solution)Robert bought a bike for PLN 1000, which he does not use. A similar new bike currently costs PLN 1700, but when selling the old one, you can only get it for PLN 800. What is the alternative cost of owning a bike? a.900 PLN b.800 PLN c.700 PLN d.1000 PLN
- Guardian is a national manufacturing company of home health care appliances. It is faced with amake-or-buy decision: a newly engineered lift can be installed in a car trunk to raise and lower awheelchair.Buy: The steel arm of the lift can be purchased for $0.60 per unit or make in house.Make: If manufactured on site, two machines will be required. Machine A is estimated to cost$18,000, have a life of 6 years, and a $2,000 salvage value. Machine B will cost $12,000, have a life of4 years, and a $-500 salvage value (carry-away cost). In addition, machine A will require anoverhaul after 3 years costing $3,000. The AOC for A is expected to be $6,000 per year and for B$5,000 per year. A total four operators will be required for the two machines at a rate of $12.50 perhour per operator. 1,000 units will be manufactured in a normal 8-hour period.Use MARR=15% to find the number of units to be manufacture each yearThe annual fixed costs for a plant are P 117447 and the variable cost per unit is P20 . The selling price is P44.06 per unit. What is the break-even point in units of production?A fabrication company engaged in production of a motor part has a production capacity of 700, 000 pieces per year. But, it is just operating at 62% of its full capacity due to unavailability to finance the importation of their materials. The company has an annual income of P 430, 000.00, annual fixed cost are P 190, 000.00 and variable costs are P 0.348 per unit. How many productions of parts must be produced for break-even point? Given:Required:Solution:
- New microelectronics testing equipment was purchased 2years ago by Mytesmall Industries at a cost of $600,000. Atthat time, it was expected to be used for 5 years and thentraded or sold for its salvage value of $75,000. Expandedbusiness in newly developed international markets is forcingthe decision to trade now for a new unit at a cost of$800,000. The current equipment could be retained, ifnecessary, for another 2 years, at which time it would have a$5000 estimated market value. The current unit is appraisedat $350,000 on the international market, and if it is used foranother 2 years, it will have M&O costs (exclusive ofoperator costs) of $125,000 per year. Determine the valuesof P, n, S, and AOC for this defender if a replacementanalysis were performed today. P = market value =$350,000AOC = $125,000 per yearn = 2 yearsS = $5,000The DN Company, which engages in the fabrication of automobile engine part with production capacity of 700,000 units per year, is only operating at 65% capacity due to unavailability of the necessary foreign currency to finance the importation of their raw materials. The current annual income is P450,000; annual fixed costs are P190,000 and variable cost are P0.35 per unit. A) What is the current profit/loss? B) What is the breakeven point in units and in pesos? C) Draw the breakeven chart.Complete each problem in excel. Submit your excel worksheet in EXCEL format so I can see how you solved the problems. Please MARK or Outline your answers so I can tell where they are. Create a CASH Flow chart and answer the following questions. The equipment will cost $620,000 and lasts the entire 11 year project. At the end of 11 years, the equipment will be sold for $91,000 in salvage. Operating costs start at $108000 and go up by 3.9% every tear. Benefits begin at $190000 and go up by 6.1% every year. The MARR value is 14% Use a MARR of 14% BUILD the CASH FLOW chart for this project. 3a. Determine the NPW 3b. Determine the AW 3c. Determine the FW 3d. Determine the IRR 3e. Graph the NPW versus MARR 3f. Are we making or losing money at 14% MARR? How can you tell?
- A piece of equipment that was purchased 2 years ago by Toshiba Imaging for $50,000 was expected to have a useful life of 5 years with a $5000 salvage value. Its performance was less than expected, and it was upgraded for $20,000 one year ago. Increased demand now requires that the equipment be upgraded again for another $16,500 so that it can be used for 3 more years. If upgraded, its M&O costs will be $22,500 and it will have a $12,000 salvage after 3 years. Alternatively, it can be replaced with new equipment priced at $65,000 with M&O costs of $14,000 per year and a salvage value of $23,000 after 6 years. If replaced now, the existing equipment will be sold for $7000. Determine the values of P, S, M&O, and n for the defender in a replacement study. The value of P is $ . The value of S is $ . The value of M&O is $ per year. The value of n is years.Do not use the excel pv, pmt and fv functions for this question. Automobiles of the future will most likely be manufactured largely with carbon fibers made from recycled plastics, wood pulp, and cellulose. Last year (year 0), Carbon Manufacturing Company purchased a piece of equipment with $50,000 for research on this. The useful life of the machine is 12 years, at the end of which, the machine is estimated to have a $10,000 salvage value. The new machine generates annual revenues of $9,500. The annual operating and maintenance expenses are estimated to be $2,500. If the organization's MARR is 6%, calculate the following: 1. a) Draw the cash flow diagram for the project. 2. b) Calculate the present worth of the project. 3. c) Calculate the annual worth of the project. 4. d) Calculate the future worth of the projectA food processing plant consumed 450,000 kW of electric energy annually and pays an average of P2.00 per kWh. A study is being made to generate its own power to supply the plant the energy required, and that the power plant installed would cost P2,000,000. Annual operation and maintenance, P800,000. Other expenses P100,000 per year. Life of power plant is 15 years; salvage value at the end of life is P200,000; annual taxes and insurances, 4% of first cost; and rate of interest is 14%. What is the rate of return? Is the power plant justifiable?