Machine X has an initial cost of $12,000 and annual maintenance of $700 per year. It has a useful life of four years and no salvage value at the end of that time. Machine Y costs $22.000 initially and has no maintenance costs during the first year. Maintenance is $200 at the end of the second year and increases by $200 per year thereafter. Machine Y has a useful life of eight years and an anticipated salvage value of $5,000 at the end of its useful life If the MARR is 6%, what is the approximate Net Present Worth (NPW) of machine X? OA-$28.563 OB-$25.852 OC-$32.085 00-$22.318

Machine X has an initial cost of $12,000 and annual maintenance of $700 per year. It has a useful life of four years and no salvage value at the end of that time. Machine Y costs $22.000 initially and has no maintenance costs during the first year. Maintenance is $200 at the end of the second year and increases by $200 per year thereafter. Machine Y has a useful life of eight years and an anticipated salvage value of $5,000 at the end of its useful life If the MARR is 6%, what is the approximate Net Present Worth (NPW) of machine X? OA-$28.563 OB-$25.852 OC-$32.085 00-$22.318

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

You are planning to purchase equipment that costs Rs. 30,000 and is expected to last 12 years with a Rs. 3,000 salvage value. The annual operating expenses are expected to be Rs. 9,000 for the first 4 years but owing to decreased use, the operating costs will decrease by Rs. 400 per year for the next 8 years. MARR is 20%. Approximately what will the present worth of this investment be? Select the value closest to your answer a) Rs. 61,000 b) Rs. 67,000 c) Rs. 72,000 d) Rs. 75,000
Alpha Electronics can purchase a needed service for $90 per unit. The same service can be provided by equipment that costs $100,000 and that will have a salvage value of $0 at the end of 10 years. Annual operating costs for the equipment will be $7,000 per year plus $25 per unit produced. MARR is 12%/year. Solve, a. Based on a future worth analysis, should the equipment be purchased if the expected production is 200 units/year?b. Based on a future worth analysis, should the equipment be purchased ifthe expected production is 500 units/year? c. Determine the breakeven value for annual production that will return MARR on the investment in the new equipment.
Determine the present worth, future worth, and annual worth of the following engineering project when the MARR is 15% per year. Is the project acceptable? Investment cost $10,000Expected life 5 yearsMarket (salvage) value $1,000Annual receipts $8,000Annual expenses $4,000
Two laser machines (A & B) used in a project and are being compared to choose one of them, for a medical center specialized in eye's treatments. The price of machine A is 1,200,000 Usdand requires an annual maintenance of 100,000 Usd, while the price of machine B is 1,000,000Dhs and requires an annual maintenance of 120,000 Usd. The expected life time for bothmachines is 8 years after which the two machines salvage values will be 150,000 Usd formachine A and 125,000 Usd for machine B. The MARR decided by the medical centeradministration is 9% per year. So tell the future calculated worth analysis to decide whuch a or b will be good to be purchased?
A machine costs $15000 and has a maintenance cost $1000 per year and a salvage value of $2500 after three years. The life cycle cost of the machine ?MARR =10%Explain each step for used formulas.
Value Lodges owns an economy motel chain and is considering building a new 200-unit motel. The cost to build the motel is estimated at $8,000,000; Value Lodges estimates furnishings for the motel will cost an additional $700,000 and will require replacement every 5 years. Annual operating and maintenance costs for the motel are estimated to be $800,000. The average rental rate for a unit is anticipated to be $40/day. Value Lodges expects the motel to have a life of 15 years and a salvage value of $900,000 at the end of 15 years. This estimated salvage value assumes that the furnishings are not new. Furnishings have no salvage value at the end of each 5-year replacement interval. Assuming average daily occupancy percentages of 50%, 60%, 70%, and 80% for years 1 through 4, respectively, and 90% for the 5th through 15th years, a MARR of 12%/year, 365 operating days/year, and ignoring the cost of land, should the motel be built? Base your decision on an internal rate of return analysis.…
You are faced with a decision on an investment proposal. Specifically, the estimated additional income from the investment is $125,000 per year; the investment cost is $400,000; and the first year estimated expense of $20,000 and will increase a rate of 5% per year. Assume an 8-year analysis period, no salvage value, and MARR = 15% per year. a. Calculate the PW and FW of this proposal? b. What is the ERR ( Ԑ=MARR) of this proposal? c. What is the Simple and Discounted payback? include the cash flow diagram and conclusion
You are faced with a decision on an investment proposal. Specifically, the estimated additional income from the investment is $125,000 per year; the investment cost is $400,000; and the first year estimated expense of $20,000 and will increase a rate of 5% per year. Assume an 8-year analysis period, no salvage value, and MARR = 15% per year. a. Calculate the PW and FW of this proposal? b. What is the ERR ( Ԑ=MARR) of this proposal? c. What is the Simple and Discounted payback? (Upload the picture of your complete solutions including the correct cash flow diagram and your conclusion.)
A new Wave soldering machine is expected to save Fast Circuit Boards 11,500 per year through a reduction of labour costs and increased quality. The machine has an expected life of 8 years, with zero salvage value after that time. The company can expect to get a 10 percent return on any investment. Determine the maximum price that they can afford to pay for the machine up front? Machine Cost
Big Bro manufacturing company purchased a delivery van having a cost of P900 000.00, a life of eight years and a salvage value of P75 000. Estimated maintenance cost is P20 000.00 per year with a major overhaul costing P80 000 required at the end of four years. Using a 14% MARR, find the annual cost of the van? (Ans. - P218 556.05)-PLEASE USE AN ACTUAL FORMULA NOT AN EXCEL
An electric cooperative is considering the use of a concrete electric pole in the expansion of its powerdistribution lines. A concrete pole costs 18,000 each and will last 20 years. The company is presentlyusing creosoted wooden poles which cost 12,000 per pole and will last 10 years. If money is worth 12percent, which pole should be used? Assume annual taxes amount to 1 percent of the first cost and zerosalvage value in both cases. Determine the best alternative using: (i = 12%)a. Annual Cost (AC) Methodb. Equivalent Uniform Annual Cost (EUAC) Methodc. Present Worth Cost (PWC) Method
A project capitalized for P5,000,000 is expected to earn a uniform annual revenue of P1,000,000 in 10 years. The cost of operation and maintenance is P100,000 a year, taxes and insurance will cost 3% of the first cost per year. If the company expects its capital to earn 12% income before taxes, would you recommend investing in the project? Use the PW method. Determine the present worth of income.Determine the present worth of cost.Will it be worthwhile to invest for the apartment?