Pearson eText for Engineering Economy -- Instant Access (Pearson+)
17th Edition
ISBN: 9780137533138
Author: William Sullivan, Elin Wicks
Publisher: PEARSON+
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Chapter 9, Problem 2P
To determine
Calculate the Annual worth.
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An existing robot can be kept if $2,000 is spent now to upgrade it for future service requirements. Alternatively, the company can purchase a new
robot to replace the old robot. The following estimates have been developed for both the defender and the challenger. The company's before-tax
MARR is 18% per year. Based on this information, should the existing robot be replaced right now? Assume the robot will be needed for an
indefinite period of time.
Defender
Current MV
Required upgrade
Annual expenses
The AW value of the defender is $
The AW value of the challenger is $
The existing robot
Annual expenses
Remaining useful life
5 years
Useful life
MV at end of useful life
-$1,400
MV at end of useful life
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 18% per year.
be replaced right now.
should not
should
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(Round to the nearest dollar)
(Round to the nearest dollar)
info
$36.000
$2,000
$1,500
Compound
Amount
Factor…
An existing robot can be kept if $2,000 is spent now to upgrade it for future service requirements. Alternatively, the company can purchase a new robot to replace the old robot. The following estimates have been
developed for both the defender and the challenger. The company's before-tax MARR is 20% per year. Based on this information, should the existing robot be replaced right now? Assume the robot will be needed for
an indefinite period of time.
Defender
Challenger
Current MV
$38,000
Purchase price
$51,000
Required upgrade
Annual expenses
$2,000
Installation cost
$5,500
$1,400
Annual expenses
$1,000
6 years
10 years
$7,000
Remaining useful life
Useful life
MV at end of useful life
- $1,500
MV at end of useful life
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 20% per year.
The AW value of the defender is $. (Round to the nearest dollar.)
An $80,000 baling machine for recycled paper was purchased by the XYZ company two years ago. The current MV of the machine is $50,000, and it can be kept in service for seven more years. MARR is 12% per year and the projected net annual receipts (revenues less expenses) and end-of-year market values for the machine are shown below. When is the best time for the company to abandon this project?
END OF YEAR
1 2 3 4 5 6 7
Net annual receipts $20,000 $20,000 $18,000 $15,000 $12,000 $6,000 $3,000
Market value 40,000 32,000 25,000 20,000 15,000 10,000 5,000
Chapter 9 Solutions
Pearson eText for Engineering Economy -- Instant Access (Pearson+)
Ch. 9 - Prob. 1PCh. 9 - Prob. 2PCh. 9 - Prob. 3PCh. 9 - Prob. 4PCh. 9 - Prob. 5PCh. 9 - Prob. 6PCh. 9 - Prob. 7PCh. 9 - A city water and waste-water department has a...Ch. 9 - Prob. 9PCh. 9 - Prob. 10P
Ch. 9 - Prob. 11PCh. 9 - Prob. 12PCh. 9 - Use the PW method to select the better of the...Ch. 9 - Prob. 14PCh. 9 - Prob. 15PCh. 9 - Prob. 16PCh. 9 - Prob. 17PCh. 9 - Prob. 18PCh. 9 - Prob. 19PCh. 9 - Prob. 20PCh. 9 - Prob. 21PCh. 9 - Prob. 22PCh. 9 - Prob. 23PCh. 9 - Prob. 24PCh. 9 - Prob. 25PCh. 9 - Prob. 26PCh. 9 - Prob. 27SECh. 9 - Prob. 28SECh. 9 - Prob. 29CSCh. 9 - Prob. 30CSCh. 9 - Prob. 31CSCh. 9 - Prob. 32FECh. 9 - Prob. 33FECh. 9 - Prob. 34FECh. 9 - Prob. 35FECh. 9 - Prob. 36FE
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