PART A.) Decide which of the following machines should be selected (if one of them MUST be selected) using a Present Worth Analysis assuming 8% interest. I want to see PWp and PWo calculated as part of the decision. First Cost, $ Annual Operating Cost, $/year Salvage Value, $ Life, years 20,000 4,000 15,000 5,000 5,000 3 5,000
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- Which equation below gives at10% interest the total EUAC of an asset with an initial cost of $30,000, an estimated salvage value of $12,000 after its 7 -year service lile a, O&M costs of $25,000 per year? EUAC=($30,000−12,000)(A/P,10%,7)+($12,000)(A/F,1006,7)+$25,000 EUAC=($30,000−12,000)(A/P,10%,7)+($12,000)(0.10)+$25,000(A/F,10%,7) EUAC=($30,000−12,000)(A/R,10%,7)+($12,000)(0.10)+$25,000 EUAC=($30,000−12,000)(A/P,10%,7)+$25,000Engineering Taylan bought a piece of land with an area of 2,000 sq m. worth P1,000,000.00. He gave a 30% downpayment and the balance to be paid for 10 years with the following terms: 1. P50,000 to be paid at the beginning of the 3rd yr. 2. P100,000 to be paid at the beginning of the 6th yr. 3. The last payment to be paid at the end of the 10th year. If i= 6% compounded quarterly, how much is his last payment?AN INDUSTRIAL PLANT IS CONSIDERING THE PURCHASE OF A CENTRIFUGAL PUMP. THREE OFFERS WERERECEIVED AND BASIS OF SELECTION HAVE BEEN TABULATED AS FOLLOWS: OFFER A OFFER B OFFER CPRICE OF PUMP P 60,000.00 P 96,000.00 P 120,000.00ECONIMIC LIFE (YEARS) 3 5 10SALVAGE VALUE @ END OF ECONOMIC LIFE P 5,000.00 P 10,000.00 P 8,000.00YEARLY MAINTENANCE COST 10,000.00 6,000.00 5,000.00IF COST OF MONEY IS 14%, WHAT OFFER WOULD YOU RECOMMEND TO BE PURCHASED? USE ROR METHOD.
- draw cash flow diagram please A project has the following cash flows. Determine the exact ROR for this project. Item Cash Flow First cost, $ 250,000 Annual Revenues, $/year 16,000 Additional Revenue, year 20, $ 600,000 O&M costs, $/year 2,500 Life, years 203. One of four ovens at the bakery is being considered for replacement. Its salvage value and maintenance costs are given in the table below for several years. A new oven costs P80,000 and this price includes a complete guarantee of the maintenance costs for the first two years, and it covers a good proportion of the maintenance costs for 3 years and 4 years. The salvage value and maintenance costs are summarized in the table below. Both the old and new ovens have similar productivities and energy costs. Should the oven be replaced this year if the MARR equals to 10%?7 An equipment’s cost is P50,000 with an economic life of 10 years. The equipment can be sold at P5,000 after 10 years. At what price can the equipment be sold after 5 years. (a) Using Straight line Method. (b) Using Sum of the years digit method. (c) Using Double Declining Balance Method (d) Using Declining Balance Method (e) Using Sinking Fund at 5%.
- J&M Manufacturing plans on purchasing a new assembly machine for $30,000 to automate one of its current manufacturing operations. It will cost an additional $5,500 to have the new machine installed. With the new machine, J&M expects to save $11,000 in annual operating and maintenance costs. The machine will last fivr years with an expected salvage value of $6,000. a. How long will it take to recover the investment (plus installation cost)? The payback period is ? years. (Round up to the nearest whole number.) b. If J&M's interest rate is known to be 13%, determine the discounted payback period. The discounted payback period is ? years. (Round up to the nearest whole number.) Please give proper explanation of the each sub question given above.will give you thumbs up only for the correct answer. Thank youSaxon Products, Incorporated, is investigating the purchase of a robot for use on the company’s assembly line. Selected data relating to the robot are provided below: Cost of the robot $ 1,800,000 Installation and software $ 470,000 Annual savings in inventory carrying costs $ 214,000 Annual increase in power and maintenance costs $ 34,000 Salvage value in 5 years $ 74,000 Useful life 5 years In addition to the data above, engineering studies suggest that use of the robot will result in a savings of 29,000 direct labor-hours each year. The labor rate is $14 per hour. Also, the smoother work flow made possible by the use of automation will allow the company to reduce the amount of inventory on hand by $404,000. This inventory reduction will take place at the end of the first year of operation; the released funds will be available for use elsewhere in the company. Saxon Products has a 16% required rate of return. Click here to view Exhibit 14B-1 and Exhibit…Lipsion Ltd company is thinking about investing in one of two potential new productsfor sale. The projections are as follows: year revenue/ (product s) revenue/ (product V) 0 (150,000) outlay (150,000) outlay 1 14,000 15,000 2 24,000 25,333 3 44,000 52,000 4 84,000 63,333 Calculate the payback period for both products in years and months, not as a decimal. Please present answer to nearest month.
- Hajia Timber Ltd (GTL) produces and exports lumber and planks. It owns a plant whichhas value of GHC 1,800,000 as at 1 January 2010. The government of Ghana,passes alegislation that restricts the exportation of lumber. Consequently GTL has to reduceproduction by 40%. Cash flow forecast for the next five years included in the budgetsubmitted for management approval in January 2010 shows the following:Year Cash flows (GHC)2010 552,0002011 506,0002012 376,0002013 250,0002014 560,000The cashflow forecast for 2014 includes expected proceeds from disposal of the plant. Thecash flow projections also ignore the effects general upwards movement in prices.It is estimated that if the plant is sold in January 2010, it would realize the net proceeds ofGHC 1,320,000. The costs of capital for GBL is 15% (ignoring inflationary effect)RequiredCalculate the recoverable amount of the plant and impairment loss (if any).A reactor of special design un the major item of equipment in a small chemical plant The initial cost of a Completely installed reactor is $ 60000 to the salvage value of the end of the useful life is estimated to be $ 10000. The total annual expenses for the plant are $100000. Excluding depreciation costs for the reactor. How many years of useful life should de estimated for the reactor if 12% of the total annual expenses for the Plant are due to the cost for reactor depreciation?You are considering buying a 10-year-old machine for $280, or a new fuel-efficient machine for$600. The new machine will save you $5 per month on your fuel bill, and you will be able to sellit for $300 in 10 years. The used machine will have no resale value at that time. Assume theinterest rate is 3% per year. According to the information given, which machine will you buy?