Ridgley Custom Metal Products (RCMP) must purchase a new tube bender. RCMP'S MARR is 14 percent. The company is considering three models:ModelTAXFirst Cost$90,000$140,000$190,000Economic Life6 years6 years5 yearsYearly Net Savings$50,000$80,000$85,000Using the annual worth method, which of the three tube benders should RCMP buy?Click the icon to view the table of compound interest factors for discrete compounding periods when i = 14%.The annual worth of Model T is $ The annual worth of Model A is $ .The annual worth of Model X is $(Round to the nearest cent as needed.)So, the Modelis the better choice to buy.Salvage Value$25,000$25,000$75,000

Annual Worth Analysis for Tube BendersWe'll calculate the annual worth of each model and choose the…

Answered: Ridgley Custom Metal Products (RCMP)…

Economics Today and Tomorrow, Student Edition

1st Edition

ISBN:9780078747663

Author:McGraw-Hill

Publisher:McGraw-Hill

Chapter6: Saving And Investing

Section6.2: Investing: Taking Risks With Your Savings

Problem 4R

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Q.30) A $100,000 investment is make over a 10-years period. A return of $23,000 occurs at the end of the first year. Each successive year yields a return that is $2,000 les than the pervious year's return. If the money is worth 8%, what is the equivalent present worth for the investment? What is the equivalent annual worth for the investment? What is the equivalent future worth for the investment?
Analysis. Solve using formula for present worth and future worth method.Write the answer.
2. Switching to powder coating technology will reduce the emission of volatile organic carbons (VOCs) for a firm's production process. The initial cost is $300,000 with annual costs of $35,000 and savings of $80,000 per year. The salvage value 10 years from now is projected to be $75,000. What rate of return will the firm make on this investment? Round your answer to the nearest .01 percent.
Solve the given question using PRESENT worth method and Future worth method
Kiwidale Dairy is considering purchasing a new ice-cream maker. Two models, Smoothie and Creamy, are available and their information is given below. (perform all calculation using 5 significant figures, and give your final answer to 1 decimal place). (a) What is Kiwidale's MARR that makes the two alternatives equivalent? Use a present worth comparison. Creamy First Cost 40,000 Service Life 12 years Annual profit 12,000 Annual operating cost 3,720 Salvage value 5,400 A MARR which makes the two alternatives equivalent in term of PW is Smoothie 15,000 12 years 4,700 1,400 2,250
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A new design of aircraft saves annually fuel consumption of 45,000 gallons of fuel costing$6 per gallon. The new design costs $1 million to accomplish. The airline company’s MARRis 10%. Considering only the fuel savings.What is the simple payback period for the new design? What is the discountedpayback period?
John was a high school teacher earning $ 80,000 per year. He quit his job to start his own business in pizza catering. To learn how to run the pizza catering business, John enrolled in a TAFE to acquire catering skills. John’s course was for 3 months. John had to pay $2,000 as tuition for the 3 months. After the training, John withdrew $110,000 from his savings account. He had been earning 5 percent interest per year for this account. He also borrowed $50,000.00 from his friend whom he pays 6 percent interest per year. John’s first year of business can be summarised as follows: Item Amount $ Revenue 250,000 Labor cost 120,000 Pizza ingredients 50,000 Equipment 10,000 Calculate John’s accounting profit and economic profit? Show your work.
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Nabil is considering buying a house while heis at university. The house costs $200 000 today. Renting out part of the house and living in the rest over his fiveyears at school will net, after expenses, $2000 permonth. He estimates that he will sell the house after five years for $210 000. If Nabil's MARRIS 6 percent compounded monthly, should he buy the house? Úse annual worth.
John was a high school teacher earning $ 80,000 per year. He quit his job to start his own business in pizza catering. In order to learn how to run the pizza catering business, John enrolled in a TAFE to acquire catering skills. John’s course was for 3 months. John had to pay $2,000 as tuition for the 3 months. After the training, John withdrew $110,000 from his savings account. He had been earning 5 percent interest per year for this account. He also borrowed $50,000.00 from his friend whom he pays 6 percent interest per year. John’s first year of business can be summarised as follows: Item Amount $ Revenue 250,000 Labour cost 120,000 Pizza ingredients 50,000 Equipment 10,000 Calculate John’s accounting profit and economic profit? Show your work
Ridgley Custom Metal Products (RCMP) must purchase a new tube bender. RCMP's MARR is 11 percent. The company is considering three models: Model T A X First Cost $100,000 $110,000 $210,000 Economic Life 7 years 8 years 6 years Using the annual worth method, which of the three tube benders should RCMP buy? Yearly Net Savings $55,000 $50,000 $75,000 Click the icon to view the table of compound interest factors for discrete compounding periods when i = 11%. The annual worth of Model T is $ ☐. The annual worth of Model A is $ The annual worth of Model X is $ ☐. So, the Model (Round to the nearest cent as needed.) is the better choice to buy. Salvage Value $15,000 $35,000 $75,000

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