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A: The time period is indicated by ‘n’ and MARR is indicated by ‘i’.
Q: Compare the defender and challenger based on the opportunity-cost?
A: Opportunity cost refers to the given up benefit in the process of getting other benefits.
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A: Sales volume = 500000 Selling price = 0.50 Total expenses = 80000
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A: In this case, the viewpoint of non owner is who owns nothing in the estimation is of greatest…
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Q: Huntington Medical Center purchased a used low-field MRI scanner 2 years ago for $445,000. Its…
A: here we calculate annual worth of scanner as follow-
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Q: When dealing with infinite life time, the salvage value would be disregarded? True or false?
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What is meant by the opportunity-cost approach
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- What two cost categories form the trade off that leads to an optimum replacement interval? a. Direct costs and indirect costs b. Insider costs and outsider costs c. Operating & maintenance costs and capital recovery costs d. Sunk costs and opportunity costs.A replacement analysis is most objectively conducted from the viewpoint of:a. an outsider.b. a consultant.c. a non-owner.d. any of the above.State-of-the-art digital imaging equipment purchased 2 years ago for $50,000 had an expected useful life of 5 years and a $5000 salvage value. After its installation the performance was poor, and it was upgraded for $20,000 one year ago. Increased demand now requires another upgrade for an additional $22,000 so that it can be used for 3 more years. Its new annual operating cost will be $27,000 with a $12,000 salvage after the 3 years. Alternatively, it can be replaced with new equipment costing $65,000, an estimated AOC of $14,000, and an expected salvage of $23,000 after 3 years. If replaced now, the existing equipment can be traded for only $7000. Use a MARR of 10% per year. (a) Determine whether the company should retain or replace the defender now. (b) Based on the poor experience with the current equipment, assume the person doing this analysis decides the challenger may be kept for only 2 years, not 3, with the same AOC and salvage estimates for the 2 years. What is the decision?
- A piece of equipment that was purchased 2 years ago by Toshiba Imaging for $50,000 was expected to have a useful life of 5 years with a $5000 salvage value. Its performance was less than expected, and it was upgraded for $20,000 one year ago. Increased demand now requires that the equipment be upgraded again for another $16,500 so that it can be used for 3 more years. If upgraded, its M&O costs will be $22,500 and it will have a $12,000 salvage after 3 years. Alternatively, it can be replaced with new equipment priced at $65,000 with M&O costs of $14,000 per year and a salvage value of $23,000 after 6 years. If replaced now, the existing equipment will be sold for $7000. Determine the values of P, S, M&O, and n for the defender in a replacement study. The value of P is $ . The value of S is $ . The value of M&O is $ per year. The value of n is years.Because it fumes at room temperatures, hydrochloric acid creates a very corrosive work environment. A machine working in that environment is deteriorating quickly and can be used for only one more year, at which time it will be scrapped with no salvage value. It was purchased 3 years ago for $88,000, and its operating cost for the next year is expected to be $49,000. A more corrosion-resistant challenger will cost $206,000 with an operating cost of $46,000 per year. It is expected to have a $50,000 salvage value after its 10-year ESL. At an interest rate of 8% per year, what minimum replacement value would render the challenger attractive? The minimum replacement value that would render the challenger attractive is $ .Guardian is a national manufacturing company of home health care appliances. It is faced with amake-or-buy decision: a newly engineered lift can be installed in a car trunk to raise and lower awheelchair.Buy: The steel arm of the lift can be purchased for $0.60 per unit or make in house.Make: If manufactured on site, two machines will be required. Machine A is estimated to cost$18,000, have a life of 6 years, and a $2,000 salvage value. Machine B will cost $12,000, have a life of4 years, and a $-500 salvage value (carry-away cost). In addition, machine A will require anoverhaul after 3 years costing $3,000. The AOC for A is expected to be $6,000 per year and for B$5,000 per year. A total four operators will be required for the two machines at a rate of $12.50 perhour per operator. 1,000 units will be manufactured in a normal 8-hour period.Use MARR=15% to find the number of units to be manufacture each year
- A replacement analysis is most objectively conducted from the viewpoint of: (a) An outsider (b) A consultant (c) A nonowner (d) Any of the aboveBecause it fumes at room temperatures, hydrochloric acid creates a very corrosive work environment. A machine, working in that environment, is deteriorating fast and can be used for only 1 more year, at which time it will be scrapped with no salvage value. It was purchased 3 years ago for $88,000; its operating cost for the next year is expected to be $53,000. A more corrosion-resistant challenger will cost $226,000 with an operating cost of $48,000 per year. It is expected to have a $60,000 salvage value after its 10-year ESL. At an interest rate of 15% per year, what minimum replacement value would render the challenger attractive?What effective steps should be taken by Engineers that will enable the firm todesign and manufacture products economically?
- Why is it -1000 and not -10,000? Greatly Appreciated! Could you please restart this question?Two automatic systems for dispensing maps are being compared by the state highway department. The accompanying breakeven chart of the comparison of these systems (System I vs. System II) shows total yearly costs for the number of maps dispensed per year for both alternatives. Answer the following questions. (a) What is the fixed cost for System I? (b) What is the fixed cost for System II? (c) What is the variable cost per map dispensed for System I? (d) What is the variable cost per map dispensed for System II? (e) What is the breakeven point in terms of maps dispensed at which the two systems have equal annual costs? (f) For what range of annual number of maps dispensed is System I recommended? (g) For what range of annual number of maps dispensed is System II recommended? (h) At 3000 maps per year, what are the marginal and average map costs for each system?The cost of a high-quality 250-horsepower compressor was $14,000 when recently purchased. What would a 600-horsepower compressor be expected to cost?