A CNC mill was purchased 4 years ago for $50,000. The current market value is $26,000, which will decline as follows over the next 5 years: $20,000, $16,250, S 14,000, $12,000, and $8500. The O&M costs are estimated to be $6000 this year. These costs are expected to increase by $2000 per year starting year 2. MARR = 10% The marginal cost for defender in year 2 Group of answer choices $13,750 $ 14,600 $ 13,875 $15,400 $12,400 is.
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- Caduceus Company is considering the purchase of a new piece of factory equipment that will cost $565,000 and will generate $135,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return In Excel, see Appendix C.A printing press was purchased 4 years ago for $100,000. The current market value is $45,000, which will decline as follows over the next 5 years: $40,000, $33,500, $28,000, $24,000, and $17,000. The O & M costs are estimated to be $16,000 this year. These costs are expected to increase by $5000 per year starting year 2. MARR = 10% The foregone interest in year 4 is _______________. A $2,400 B. $2,200 C. $1,850 D. $0An asset purchased 5 years ago for $75,000 can be sold today for $15,000. Operating expenses will be $10,000 this year, but these will increase by $1500 per year. It is estimated that the asset’s salvage value will decrease by $1000 per year over the next 5 years. If the MARR used by the company is 15%, calculate the total marginal cost of ownership of this old asset (that is, the currently implemented asset) for each of the next 5 years.
- A printing press was purchased 4 years ago for $100,000. The current market value is $45,000, which will decline as follows over the next 5 years: $40,000, $33,500, $28,000, $24,000, and $17,000. The O & M costs are estimated to be $16,000 this year. These costs are expected to increase by $5000 per year starting year 2. MARR = 10% The EUAC for defender in year 2 is ____________. A. $31,600 B. $28,357 C. $ 34,100 D. $25,400A machine was purchased 4 years ago. Its current market value is $14,000. Estimated future market values and annual operating costs for the next 5 years are given in the following table. What is the Economic service life of the machine if a 12% per year return is required? YearMarket Value,$Annual Operating cost,$ 10084 2 2684 2700 3000 3500 4900 1 8084 6000 3 4 2000 5Five years ago your company purchased some equipment for $125,000. The annual costs for operating and maintaining the equipment are $1500 a year and today's market value is $75,000 decreasing by 10% of original cost per year. What analysis can be done for the remaining life of this equipment and what is the value you would use for the next year if MARR = 12%? of $
- This asset is similar across other asset replacement questions: An asset has a first cost of $70,000. In the first year the asset loses $20,000 in value, and then falls in value by 20% per year thereafter. Operating and Maintenance costs are $20,000 in the first year and increases by $5000 per year each year going forward. MARR = 10%. Find the EAC for N=5. The answer is within $500 of which of the following?Consider equipment for the expansion of a production line that will cost $600,000 up front (i.e., today, t = 0). The production line will be depreciated using a 3-year straight-line schedule. At the end of Year 3, the used equipment will have no value. The new line will generate earnings according to the schedule below. What is the Average Accounting Return (AAR) of the new production facility? Answer with a number rounded to three decimal places, e.g., 4.0877% should be entered as 4.088. Year 01 Earnings = $24,500 Year 02 Earnings = $26,000 Year 03 Earnings = $27,250A company with $630,000 in operating assets is considering the purchase of a machine that costs $74,000 and which is expected to reduce operating costs by $20,000 each year. These reductions in cost occur evenly throughout the year. The payback period for this machine in years is closest to (Ignore income taxes.): (Round your answer to 1 decimal place.) Multiple Choice 3.7 years 8.5 years 0.27 years
- A manufacturing company plans to replace an existing production line with a newer and more energy effcient model. The cost of acquisition and installation is $40,000. The new equipment will save 200,000 kWh of electricity consumption every year, while the production capacity remains unchanged. The cost of the electricity will be $0.1/kWh in the first year of operation and is expected to increase at the rate of 4% per year afterwards because of inflation. Assume that the equipment has a service life of five years and will be operated for 4,000 hours per year. Considering that the equipment has no salvage value, determine the equivalent dollar savings per each operating hour at i = 9%. A) $5.38 B) $2.81 C) $2.43 D) Answers A, B and C are not correctWe are considering the introduction of new product. Currently we are in the 27% tax bracket with a 10% discount rate. The project is expected to last five years and then, it will be terminated. The following information describes the new project: Cost of new plant and equipment RM 8,900,000 Shipping and installation costs RM 400,000 Unit Sales: Year Units Sold 1 70,000 2 120,000 3 140,000 4 80,000 5 60,000 Sales price per unit: RM300/unit in Years 1-4 and RM260/unit in Year 5 Variable cost per unit: RM180/unit Annual fixed costs: RM300,000 per year Working capital requirements: There will be an initial working capital requirement of RM100,000 just to get production started. For each year, the total investment in net working capital will be equal to 10% of the dollar value of sales for that year. Thus, the investment in working capital will increase during Years 1 through 3, then…A company with $500,000 in operating assets is considering the purchase of a machine that costs $60,000 and which is expected to reduce operating costs by $15,000 each year. These reductions in cost occur evenly throughout the year. The payback period for this machine in years is closest to (Ignore income taxes - O 0.25 years 8.3 years 04 years 33.3 years