Two flash vaporizer machines are considered for the upgrade of biodiesel production. An engineer is asked to perform analyses to select the best machine. He prepares the following information for the evaluation. Machine X has a useful life of 8 years and machine has a useful ife of 11 years. Machine First costs Net annual revenue Market value at the end of the useful life Life, years $29,000 $32,000 $10,500 $12,000 $6900 $6000 11 Please calculate your answer to the nearesr dollar. Format 0000 No commas Note you may have to use Excel to calculate the discount factor if no textbook table value exists. (Use 4 decimal places) a) The PW of the CR(8) for Machine Y is? sO b) The PW of the MV(8) for Machine Y is? $O e) The imputed market value, IMV of Machine Y at the end of yoar 8 is? SO 4) The AW of Machine X is? sO 0) The AW of Machine Y is? $O n Which machine should be selected using an interest rate of 13% per year and a study period of 8 years. OA. OB. Machine Y because AW(X) > AW(Y) OC. Machine Y because PWY) > PW (X) OD. Machine X because AWX) < AW(Y)
Two flash vaporizer machines are considered for the upgrade of biodiesel production. An engineer is asked to perform analyses to select the best machine. He prepares the following information for the evaluation. Machine X has a useful life of 8 years and machine has a useful ife of 11 years. Machine First costs Net annual revenue Market value at the end of the useful life Life, years $29,000 $32,000 $10,500 $12,000 $6900 $6000 11 Please calculate your answer to the nearesr dollar. Format 0000 No commas Note you may have to use Excel to calculate the discount factor if no textbook table value exists. (Use 4 decimal places) a) The PW of the CR(8) for Machine Y is? sO b) The PW of the MV(8) for Machine Y is? $O e) The imputed market value, IMV of Machine Y at the end of yoar 8 is? SO 4) The AW of Machine X is? sO 0) The AW of Machine Y is? $O n Which machine should be selected using an interest rate of 13% per year and a study period of 8 years. OA. OB. Machine Y because AW(X) > AW(Y) OC. Machine Y because PWY) > PW (X) OD. Machine X because AWX) < AW(Y)
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
10th Edition
ISBN:9781337902571
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter12: Cash Flow Estimation And Risk Analysis
Section: Chapter Questions
Problem 10P: Dauten is offered a replacement machine which has a cost of 8,000, an estimated useful life of 6...
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Transcribed Image Text:Two flash vaporizer machines are considered for the upgrade of biodiesel production. An engineer is asked to perform analyses to select the best machine. He prepares the following information for the evaluation. Machine X has a useful life of 8 years and machine Y
has a useful life of 11 years.
Machine
$32,000
$12,000
First costs
$29,000
Net annual revenue
$10,500
Market value at the end of the
useful life
$6900
$6000
Life, years
8
11
Please calculate your answer to the nearesr dollar. Format 0000 No commas
Note you may have to use Excel to calculate the discount factor if no textbook table value exists. (Use 4 decimal places)
a) The PW of the CR(8) for Machine Y is? S
b) The PW of the MV(8) for Machine Y is? S
c) The imputed market value, IMV of Machine Y at the end of year 8 is? S
d) The AW of Machine X is? S
e) The AW of Machine Y is? S
f) Which machine should be selected using an interest rate of 13% per year and a study period of 8 years
O A.
O B. Machine Y because AW(X) > AW(Y)
OC. Machine Y because PW(Y) > PW (X)
OD. Machine X because AW(X) < AW(Y)
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