Required InformationParker Hannifin of Cleveland, Ohto, manufactures CNG fuel dispensers. It needs replacement equipment to streamline oneof Its production lines for a new contract, but It plans to sell the equipment at or before its expected life is reached at anestimated market value for used equipment.Select between the two options using the corporate MARR of 15% per year and a future worth analysis for the expected use period.OptionFirst CostAOC. per YearExpected Market ValueExpected UseS-64,000$-22,000S-74,000S-24,000$8,5006 years$7,500З уearsThe future worth of option D Is SThe future worth of option E 1s SOption Eis selected.

MARR = 15% Option D First cost = -64,000 AOC per year = -22,000 Market Value at end = 7,500 Time…

Requlred Informatlon Parker Hannifin of Cleveland, Ohlo, manufactures CNG fuel dispensers. It needs replacement equipment to streamline one of Its production lines for a new contract, but It plans to sell the equipment at or before ts expected life is reached at an estimated market value for used equipment. Select between the two optlons using the corporate MARR of 15% per year and a future worth analysis for the expected use period. Option First Cost AOC. per Year Expected Market Value Expected Use E S-64,000 $-22.000 S-74,000 S-24,000 $8,500 6 years $7.500 3 years The future worth of option D I S The future worth of option E IS S Option E is selected.

Requlred Informatlon Parker Hannifin of Cleveland, Ohlo, manufactures CNG fuel dispensers. It needs replacement equipment to streamline one of Its production lines for a new contract, but It plans to sell the equipment at or before ts expected life is reached at an estimated market value for used equipment. Select between the two optlons using the corporate MARR of 15% per year and a future worth analysis for the expected use period. Option First Cost AOC. per Year Expected Market Value Expected Use E S-64,000 $-22.000 S-74,000 S-24,000 $8,500 6 years $7.500 3 years The future worth of option D I S The future worth of option E IS S Option E is selected.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter12: Capital Investment Analysis

Section: Chapter Questions

Problem 2E: Average rate of returncost savings Maui Fabricators Inc. is considering an investment in equipment...

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