The cost of building an office complex, x floors high, in a prime location in Accra is made up of three components: GH¢10 million for the land GH¢1/4 million per floor Specialized costs of GH¢10000x per floor. How many floors should the office complex contain if the average cost per floor is to be minimized
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- The cost of building an office complex, x floors high, in a prime location in Accra is made up of three components:
- GH¢10 million for the land
- GH¢1/4 million per floor
- Specialized costs of GH¢10000x per floor.
How many floors should the office complex contain if the average cost per floor is to be minimized?
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- Due to the high crime rate in the city center, the state council in partnership with the police has installed CCTV in several “hotspot” areas. The installation of the CCTV cost USD1000000. The cost of CCTV maintenance in the first year is USD500,000, USD700000 in the second year, USD950000 in the third year, USD990000 in the fourth year and costs are realized at the end of each year. On the other hand, the installation of CCTV will help to reduce crime in that area and is predicted to bring about a benefit of USD2000000 for the first and second year and a benefit of USD 3000000 for the third and fourth year. At the end of the fourth year, the CCTV will be replaced by a new one and it can be resold as second hand for USD200000. Assume the discount rate of 3% is used. Calculate the present value of net benefits assuming that the benefits are realized at the beginning of each of the three years. Also, draw the timeline of benefits and costs.Due to the high crime rate in the city center, the state council in partnership with the police has installed CCTV in several “hotspot” areas. The installation of the CCTV cost USD1000000. The cost of CCTV maintenance in the first year is USD500,000, USD700000 in the second year, USD950000 in the third year, USD990000 in the fourth year and costs are realized at the end of each year. On the other hand, the installation of CCTV will help to reduce crime in that area and is predicted to bring about a benefit of USD2000000 for the first and second year and a benefit of USD 3000000 for the third and fourth year. At the end of the fourth year, the CCTV will be replaced by a new one and it can be resold as second hand for USD200000. Assume the discount rate of 3% is used. Calculate the present value of net benefits assuming that 40% of the benefits are realized at the beginning of the year and the balance at the end of the year.Due to the high crime rate in the city center, the state council in partnership with the police has installed CCTV in several “hotspot” areas. The installation of the CCTV cost USD1000000. The cost of CCTV maintenance in the first year is USD500,000, USD700000 in the second year, USD950000 in the third year, USD990000 in the fourth year and costs are realized at the end of each year. On the other hand, the installation of CCTV will help to reduce crime in that area and is predicted to bring about a benefit of USD2000000 for the first and second year and a benefit of USD 3000000 for the third and fourth year. At the end of the fourth year, the CCTV will be replaced by a new one and it can be resold as second hand for USD200000. Assume the discount rate of 3% is used. Calculate also Year 0 a). Calculate the present value of net benefits assuming the benefits are realized at the end of each of the four years. Also, draw the timeline of benefits and costs. b) Calculate the present value of…
- Due to the high crime rate in the city center, the state council in partnership with the police has installed CCTV in several “hotspot” areas. The installation of the CCTV cost USD1000000. The cost of CCTV maintenance in the first year is USD500,000, USD700000 in the second year, USD950000 in the third year, USD990000 in the fourth year and costs are realized at the end of each year. On the other hand, the installation of CCTV will help to reduce crime in that area and is predicted to bring about a benefit of USD2000000 for the first and second year and a benefit of USD 3000000 for the third and fourth year. At the end of the fourth year, the CCTV will be replaced by a new one and it can be resold as second hand for USD200000. Assume the discount rate of 3% is used. a). Calculate the present value of net benefits assuming the benefits are realized at the end of each of the four years. Also, draw the timeline of benefits and costs.An engineering consulting firm measures its output in a standard service hour unit, which is a function of the personnel grade levels in the professional staff. The variable cost (cv) is $62 per standard service hour. The charge-out rate [i.e., selling price (p)] is $85.56 per hour. The maximum output of the firm is 160,000 hours per year, and its fixed cost (CF ) is $2,024,000 per year. For this firm, (a) what is the breakeven point in standard service hours and in percentage of total capacity? (b) what is the percentage reduction in the breakeven point (sensitivity) if fixed costs are reduced 10%; if variable cost per hour is reduced 10%; and if the selling price per unit is increased by 10%?The cost of building an office complex, x floors high, in a prime location in Accra is made up of three components: (a) GH¢10 million for the land (b) GH¢1/4 million per floor (c) Specialized costs of GH¢10000x per floor. How many floors should the office complex contain if the average cost per floor is to be minimized?
- Mid-Valley Industrial Extension Service, a state-sponsoredagency, provides water quality sampling services toall business and industrial firms in a 10-county region.Last month, the service purchased all necessary lab equipmentfor full in-house testing and analysis. Now, an outsourcingcompany has offered to take over this function ona per-sample basis. Data and quotes for the two optionshave been collected. The MARR for government projectsis 5% per year and a study period of 8 years is chosen.In-house: Equipment and supplies initially cost$125,000 for a life of 8 years, an AOCof $15,000, and annual salaries of$175,000. Sample costs average $25.There is no significant salvage valuefor the equipment and supplies currentlyowned.Outsourced: Cost averages $100 per sample for thefirst 5 years, increasing to $125 persample for years 6 through 8. Determine the breakeven number of tests between the two options.Mid-Valley Industrial Extension Service, a state-sponsoredagency, provides water quality sampling services toall business and industrial firms in a 10-county region.Last month, the service purchased all necessary lab equipmentfor full in-house testing and analysis. Now, an outsourcingcompany has offered to take over this function ona per-sample basis. Data and quotes for the two optionshave been collected. The MARR for government projectsis 5% per year and a study period of 8 years is chosen.In-house: Equipment and supplies initially cost$125,000 for a life of 8 years, an AOCof $15,000, and annual salaries of$175,000. Sample costs average $25.There is no significant salvage valuefor the equipment and supplies currentlyowned.Outsourced: Cost averages $100 per sample for thefirst 5 years, increasing to $125 persample for years 6 through 8. Use a spreadsheet to graph the AW curves for both options for test loads between 0 and 5000 per year in increments of 1000 tests. What is the…The fixed cost for a steam line per meter of pipe is $450X + $50 per year. Thecost for loss of heat from the pipe per meter is $4.8/X1/2 per year. Here, Xrepresents the thickness of insulation in meters, and X is a continuous designvariable. Solve, a. What is the optimum thickness of the insulation? b. How do you know that your answer in Part (a) minimizes total cost per year? c. What is the basic trade-off being made in this problem?
- Rho Merchandising supplies T-shirts to AK Mart. Currently, Rho orders T-shirts from varioussuppliers. One of the T-shirts is ordered in batches of 150 units. It has been estimated that an annualdemand for T-shirts is 25,000 pieces. Furthermore, carrying cost is estimated to be P10 per T-shirt peryear. For the other policy to be optimal, determine what the ordering cost would have to be.The U.S. Army received two proposals for a turnkey design/build project for barracks for infantry unit soldiers in training. Proposal A involves an off-the-shelf “bare-bones” design and standard grade construction of walls, windows, doors, and other features. With this option, heating and cooling costs will be greater, maintenance costs will be higher, and replacement will occur earlier than proposal B. The initial cost for A will be $750,000. Heating and cooling costs will average $6000 per month with maintenance costs averaging $2000 per month. Minor remodeling will be required in years 5, 10, and 15 at a cost of $150,000 each time in order to render the units usable for 20 years. They will have no salvage value. Proposal B will include tailored design and construction costs of $1.1 million initially with estimated heating and cooling costs of $3000 per month and maintenance costs of $1000 per month. There will be no salvage value at the end of the 20-year life. Which proposal should…The property appraisal district for Marin County has just installed new software to trackresidential market values for property tax computations. The manager wants to know the totalequivalent cost of all future costs incurred when the three county judges agreed to purchasethe software system. If the new system will be used for the indefinite future, find theequivalent value (a) now and (b) for each year hereafter. The system has an installed cost of$2,500,000 and an additional cost of $700,000 at year 8. The annual software maintenancecontract cost is $75,000 for the first 4 years, $100,000 for the second 4 years, $125,000 for thethird 4 years, and $125,000 thereafter. In addition, there is expected to be a recurring majorupgrade cost of $100,000 every 14 years. Assume that i= 7% per year for county funds.