With the estimates shown below, Sarah needs to determine the trade-in (replacement) value of machine X that will render its AW equal to that of machine Y at an interest rate of 13% per year. Determine the replacement value. Market Value, $ Annual Cost, $ per Year Salvage Value Life, Years Machine X ? -56,500 13,500 3 Machine Y 84,000 -40,000 for year 1,increasing by 2000 per year thereafter. 18,000 5

With the estimates shown below, Sarah needs to determine the trade-in (replacement) value of machine X that will render its AW equal to that of machine Y at an interest rate of 13% per year. Determine the replacement value. Market Value, $ Annual Cost, $ per Year Salvage Value Life, Years Machine X ? -56,500 13,500 3 Machine Y 84,000 -40,000 for year 1,increasing by 2000 per year thereafter. 18,000 5

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Calculate the present worth of all costs for a newly acquired machine with an initial cost of $30,000, no trade-in value, a life of 12 years, and an annual operating cost of $16,000 for the first 5 years, increasing by 10% per year thereafter. Use an interest rate of 10% per year. The present worth of all costs for a newly acquired machine is determined to be $ __________ plz answer correct asap help Dont answer by pen pepar
Required information Cisco Systems expects sales to be described by the cash flow sequence (6000 + 5k), where k is in years and cash flow is in millions. Determine the value of n for the gradient if the cash flow ends in year 11. The range of k is 1, 2, . n. ..... The value of n is 55006000 O
Please no written by hand and no emage John is evaluating his truck inventory. One three year old vehicle has a book value of $22 500. Currently its maintenance costs are $1 100 per year. They have increased by 20% annually and are expected to increase by the same percentage in the future. Calculate the equivalent annual costs for the first five years knowing that the van's purchase price was $32 000 and the minimum acceptable rate of return is 15%.
Calculate the future worth (FW) at 10% of a project that will save $25K per year for 20 years. The first cost is $120K, and the salvage value is $20K. Compare this with the PW and the EAW. (Please show the process and solution ty.)
Maintenance cost of a machine is S 100 during the second year and to increase by $ 100 every year for the succeeding 5 years. What is the present value of the maintenance costs if the gradient to present equivalent conversion factor is equal to 32.18,the gradient to uniform series conversion factor is 4.59, the gradient to future equivalent conversion factor is 42.87. Show solutions
Which car has a lower EUAC if the owner can earn 5% in his best investment?Initial Cost: Corolla ($19200), Prius ($25500)Annual maintenance: Corolla ($1000), Prius ($1500)Annual gas and oil (increasing 15% yearly): Corolla ($2500), Prius ($1200)Salvage value (Year 8): Corolla ($8000), Prius ($10000)
. Calculate the present worth of a machine which costs $105000 initially and has a 10 year life with a $20000 salvage value. The operating cost of the machine is expected to be $6000 in year 1(end_of_year) and $6600 in year 2, and amounts increasing by the 10% through its 10-year life. Use an interest rate of 12% per year. Please don't used excel I again says don't used excel
An electronics firm invested $50,000 in a precision inspection device. They spend $1500 each year to operate and maintain it. An additional $750 is spent in years 2 and 4 for software updates. At the end of 5 years, the firm changed their inspection procedure, eliminating the need for the device. The purchasing agent was very fortunate to sell the inspection device for $40,000, the original price. Compute the equivalent uniform annual cost during the 5 years the device was used. Assume interest at 10% per year.
Lim Bon Fing Y Hermanos Inc has offered for sale its two-storey building in thecommercial district of Cebu City. The building contains two stores on the ground floor anda number of offices on the second floor.A prospective buyer estimates that if he buys this property, he will hold it for about 10years. He estimates that the average receipts from the rental during this period to beP350,000.00 and the average expenses for all purpose in connection with its ownershipand operation (maintenance and repairs, janitorial services, insurance, etc.) to beP135,000.00. He believes that the property can be sold for a net of P2,000,000 at the endof the 10th year. If the rate of return on this type of investment is 7%, determine thecash price of this property for the buyer to recover his investment with a 7% return beforeincome taxes.ANSWER: P2,526,768.61
It is proposed to place a cable on an existing pole line along the shore of a lake to connect two points on opposite sides. Land Submarine Route Route Length, 10 miles First cost of cable per P45,871 P64,887 mile Annual Maintenance P1,005 P3,994 per mile Interest 18% 18% Net salvage value per P12,924 P22,049 mile Useful Life, 15 15 years What is the savings per year when you picked the more economical compare to the other route. Use EUAC method when comparing. DELL
A firm will install one of two mechanical devices to reduce costs. Both devices have useful lives of 5 years and no salvage value. Device A costs $10,000 and can be expected to result in $3000 savings annually. Device B costs $13,500 and will provide cost savings of $3000 the first year, but savings will increase $500 annually, making the second-year savings $3500, the third-year savings $4000, and so forth. With interest at 7%, which device should the firm purchase?
A $2500 computer system can be leased for $79 per month for 3 years. After 3 years, it can be purchased for $750. This is also the salvage value if the system was purchased originally. What is the effective annual rate for leasing the computer? Ans. i = 1.75% r= 23.10% Show your ful detailed solutions...