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- What is the total lifetime cost of the system given the following information? The initial cost of the system is $4800. The system has annual maintenance costs of $175. On the fourth year, an overhaul cost of $350 is scheduled. The system is expected to last for 5 years. The discount rate is 8%. Answer to the nearest dollar $________.00.A construction firm is considering establishingan engineering computing center. The center will beequipped with three engineering workstations thatcost $45,000 each, and each has a service life of fiveyears. The expected salvage value of each workstation is $2,000. The annual operating and maintenancecost would be $25,000 for each workstation. At aMARR of 15%, determine the equivalent annual costfor operating the engineering center.You just purchased a pin-inserting machine to relieve some bottleneck problems that have been created in manufacturing a PC board. The machine cost $56,000 and has an estimated service life of five years. At that time, the estimated salvage value would be $5,000. The machine is expected to operate 2,500 hours per year. The expected annual operating and maintenance cost would be $6,000. If your firm's interest rate is 15%, what would be the machine cost (owning and operating) per hour?
- A food processing plant consumed 450,000 kW of electric energy annually and pays an average of P2.00 per kWh. A study is being made to generate its own power to supply the plant the energy required, and that the power plant installed would cost P2,000,000. Annual operation and maintenance, P800,000. Other expenses P100,000 per year. Life of power plant is 15 years; salvage value at the end of life is P200,000; annual taxes and insurances, 4% of first cost; and rate of interest is 14%. What is the rate of return? Is the power plant justifiable?You are considering two alternative machines, Machine A and Machine B, for a manufacturing process. One of the machines, Machine A, costs $40,000 to set up and $6,000 per year to operate, but It must be completely replaced every 7 years, and it has no salvage value. Assuming the cost of capital is 8.7%, what is the equivalent annual cost of the machine?Suppose the reader has an old car, which is a gas guzzler. It is 10 years old and could sell for $400 cash to a local dealer. Assume that your MV in two years is zero. For the foreseeable future, annual maintenance expenses will average $800, and the car will get only 10 miles per gallon. Gasoline costs $1.50 per gallon, and the car is used an average of 15,000 miles per year. You now have the opportunity to replace your old car with a better one that costs $8,000. If I bought it, I would pay cash. Maintenance costs are expected to be negligible since it has a two-year warranty. This car averages 30 miles per gallon. Use the IRR method to determine which alternative should be selected. Use a two-year analysis period and assume that the new vehicle can sell for $5,000 at the end of year two. The MARR is 15% per year. Mention any other assumptions you make.
- Consider a piece of industrial equipment that has an installed cost of $100,000. The equipment is expected to generate $30,000 worth of annual energy savings during its first year of installation. The value of these annual savings is expected to increase at the rate of 5% per year because of increased fuel costs. Assume that the equipment has a service life of five years (or 3,000 operating hours per year) with no appreciable salvage value. Determine the equivalent dollar savings per each operating hour at i = 14%.A contractor has purchased a wheel loader for $115,000 and plans to use it for 2,000 hours per day. The cost of one set of tires is $25,000. At this usage rate, the contractor anticipates disposing of the loader after using it for 10 years and realizing a salvage value of $35,000. The flywheel horsepower rating of the loader's diesel engine is 105 horsepower. The interest rate is 10%. The loader operator will earn $34.00 per hour including fringe benefits, and diesel fuel costs $1.20 per gallon. How much is the contractor's hourly ownership cost for the loader if using time value money analysis?Calculate the LCOE of the following power plants. Assume a useful life of 25 years and a discount rate of 5% for all plants, for simplicity. Report the LCOE for each plant.
- In a replacement analysis problem, the following information is available Initial cost : 12.000 YTL Annual maintenance cost: None in the first three years 2.000 YTL at the end of the 4th year 2.000 YTL at the end of the 5th year 2,500 YTL per year after the 5th year will increase smoothly (at the end of the 6th year, 4.500 YTL 7.000 YTL at the end of the 7th year, etc. The scrap value in any given year is zero. Take the discount rate of 10% and ignore income taxes. Calculate the most economical life for this candidate equipment. A) 6 B) 2 C) 5 D) 8 E) 4Calumet Electronics purchased a device for $75,000 four years ago (existing device). The company is considering purchasing a new device, that will cost $92,000. Assume the company has a MARR of 12% per year, compounded annually. The new device can be purchased for $92,000 with annual operating and maintenance expenses of $1,184 per year. At the end of 4 years, the company can sell the new device for $45,678. The new device also requires a one-time expense of $2,791 at the end of year 4 to install new software prior to selling it. What is the equivalent uniform annual cost of the new device if it is kept in service for 4 years?Describe the process of determining the equivalent annual worth of the project and the unit profit per production?