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- The cost of a biomedical image scanning machine is 95000 with an estimated annual maintenance cost of $4500 and an overhauling cost of 3000 in year 6. The machine is projected to save $25000 in direct labor cost annually. Biomedical Analytics Inc. the company who purchased the machine plans to sell it 10 years from now at a price of $35000. a) Draw the cash flow diagram b) Determine the Rate of Return (ROR) if staring with two initial guesses of 18% and 20% Hints: Profit= R-TC Profit = rQ-(FC+ v Q = Annual QuantityCombined-cycle power plants use two combustion turbines to produceelectricity. Heat from the first turbine’s exhaust is captured to heatwater and produce steam sent to a second steam turbine thatgenerates additional electricity. A 968-megawatt combined-cycle gasfired plant can be purchased for P450 million, has no salvage value,and produces a net cash flow (revenues less expenses) of P50 millionper year over its expected 30-year life.a. If the hurdle rate (MARR) is 14% per year, how profitable aninvestment is this power plant?b. What is the simple payback period for the plant? Is this investmentacceptable?Problem 03.041 Shifted Gradients Nippon Steel's expenses for heating and cooling a large manufacturing facility are expected to increase according to an arithmetic gradient beginning in year 2. If the cost is $550,000 this year (year O) and will be $550,000 again in year 1, but then it is estimated to increase by $57,000 each year through year 12, what is the equivalent annual worth in years 1 to 12 of these energy costs at an interest rate of 14% per year? The equivalent annual worth is determined to be $
- The packing cooling tower that cools condensing water for a power plant progressively detcriorates and results in gradually rising costs due to reduced plant efficiency. These costs are treated as lump sums at the end of the year, as showm in Fig 3:6-The cost is zero for the first year and then increases $1000 per year until the packing is 16 years old, when replacement is mandatory. At a point 8 years into the life of the packing (just aſter the $7000. annual cost has been assessed), a decision is to be made on the plan for the next 8 years i.e., whether to replace the packing or to continue with the existing packing. Money can be borrowed at 9 percent interest, compounded annually. What is the maxinmum amount that could be paid for the packing in order to justify its replacement ?Hydrosys water engineering Inc. plan to construct water purification plant in Arlington, Texas, to supply portable water to 500,000 Texas homes. Hydrosys will spend $1.45 billion in constructing the plant and $650000 per year in operating it. If a salvage value of 35% of the initial cost is estimated at the end of the project (possibly for the equipment and other disposable items). Hydrosys intends to run the project for 15 years before transferring the operation to the county government. A complete overhaul of the plant will be conducted at the end of year 6 and 11 at an extra cost of S450000 and 575000 respectively. Considering an interest rate of 10% per year: a) The engineering economy symbols and their value for each option. b) Construct the Cash flow diagram c) Calculate the Present Worth of the Cash flow EstimatesThe heat loss through the exterior walls of a certain manufacturing plant is estimated to cost $29000 at EOY 1. ABC Insulation, Inc., told the owner of the plant that the heat loss can be reduced by 80% if he is willing to spend $401,000 to install its innovative insulation material. The cost of heat loss is expected to rise by $2100 per year (uniform gradient) after the next year. The owner plans to keep the present building for 15 more years. Assume MARR (minimum acceptable rate of return) is 4% per year. (a) What is the present equivalent value of the cost savings in the reduction of heat loss for these 15 years? Round off your final answer to nearest thousand. (b) Using AW method, would you recommend the owner to install ABC's new insulation material? Why?
- An integrated, combined cycle power plant produces 285 MW of electricity by gasifying coal. The capital investment for the plant is $570 million, spread evenly over two years. The operating life of the plant is expected to be 20 years. Additionally, the plant will operate at full capacity 75% of the time (downtime is 25% of any given year). The MARR is 6% per year. Solve, a. If this plant will make a profit of three cents per kilowatt-hour of electricity sold to the power grid, what is the simple payback period of the plant? Is it a low-risk venture? b. What is the IRR for the plant? Is it profitable?The year-end operating and maintenance costs of a certain machine are estimated to be P13,500 the first year and to increase by P2,3OO each year during its 6 year life. If capital is worth 14%, determine the equivalent uniform year-end costs? A’ = Php 18,380.19 A’ = Php 19,436.26 A’ = Php 20,468.34 A’ = Php 21,467.43Mrs Right just purchased a new machine and wants to also set aside cash for future maintenance expenses. The machine has a bumper-to-bumper warranty for the first four years. Right estimates that she will need approximately $3,000 per year in maintenance expenses for years 5-10, at which time she will sell the machine. How much money should Right deposit into an account today, at 1% per month, so that she will have sufficient funds in that account to cover her projected maintenance expenses?
- An integrated, combined cycle power plant produces 285 MW of electricity by gasifying coal. The capital investment for the plant is $570 million, spread evenly over two years. The operating life of the plant is expected to be 20 years. Additionally, the plant will operate at full capacity 75% of the time (downtime is 25% of any given year). The MARR is 6% per year Cash flow diagram only Thank you No need calculation. Please helpU.S. Steel is considering a plant expansion to produce austenitic, precipitation hardened, duplex, and martensitic stainless steel round bars that is expected to cost $15 million now and another $10 million 1 year from now. If total operating costs will be $1.3 million per year starting 1 year from now, and the estimated salvage value of the plant is virtually zero, how much must the company make annually in years 1 through 11 to recover its investment plus a return of 24% per year? The company must make $ ? million annually in years 1 through 11 to recover its investment plus a return of 24% per year.U.S. Steel is considering a plant expansion to produce austenitic, precipitation hardened, duplex, and martensitic stainless steel round bars that is expected to cost $18 million now and another $10 million 1 year from now. If total operating costs will be $1.4 million per year starting 1 year from now, and the estimated salvage value of the plant is virtually zero, how much must the company make annually in years 1 through 9 to recover its investment plus a return of 24% per year? The company must make $ return of 24% per year. million annually in years 1 through 9 to recover its investment plus a