A new airconditioning unit costs P150,000 and will have a salvage value of P15,000 after 5 years. Electrical cost per kWh is P1.25. Calculate the annual savings in terms of electrical savings if MARR is 15% per ye
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A new airconditioning unit costs P150,000
and will have a salvage value of P15,000
after 5 years. Electrical cost per kWh is
P1.25. Calculate the annual savings in terms
of electrical savings if MARR is 15% per year.
Step by step
Solved in 2 steps
- Savings of $5600 per year can be achieved through either a $14 000 machine (A) with a seven-year service life and a $2000 salvage value, or a $25 000 machine (B) with a 10-year service life and a $10 000 salvage value. If the MARR is 8 percent, which machine is the better choice, and what is the annual benefit or cost of the better choice? Use annual worth comparison.A machine cost P10M and will have scrap value of 10% of the first cost at the end of 10 years. If money is worth 12%. Find the annual investment and the capitalized cost of the machine.Annual maintenance costs for a rotary kiln is P2,000. The placement if a new refractory would reduce the annual maintenance cost to P700 a year for the first 5 years and to P1,200 a year for the next 5 years. The annual maintenance cost after 10 years would be again P2,000. If maintenance cost are the only savings, what maximum investment can be justified for the new refractory? Assume interest at 4%.
- Improvements will be made in an assembly line with an initial investment cost of 67 000 TL, annual maintenance costs 3500 TL in 3 years. Each major maintenance is worth 6000 TL each, and the useful life of these improvements is expected to be 12 years. Find the present value of costs when the interest rate is 8%.A new machine will cost P17000 and will have an estimated salvage value of P11000 in five years. Special tools for the new machine will cost P5000 and will have a resale value of P2500 at the end of five years. Maintenance costs are estimated at P200 per yr. What will be the average annual cost of ownership during the next five years if interest is 6%?A new die press machine costs $ 150,000, and lasts 8 years with salvage value of $20,000. Annual operating costs are $50,000. If you want to make a 10% return on investment, what is the minimum annual revenue required from this machine?
- Improvements with an initial investment cost of 67,000 TL will be made in an assembly line. Yearlymaintenance costs are 3.500 TL, and major maintenance every 3 years is 6.000 TL each.is worth. As the useful life of these improvements is expected to be 12 years, the interest rateFind the present value of costs when the ratio is 8%.A project yields annual benefits of 75,000 for 10 years with 0 salvage value. It is designed to have a benefit cost ratio of 2. Determine the cost of the project if money is worth 10%The cost of a special purpose equipment will increase at the rate of 10% per year. If the cost for the first year is $10,000, what is the present worth of the costs for a 3-year time period at a MARR of 12% per year compounded annually? Your Answer:
- A project is estimated to cost P120T, last 8 years & have a salvage value of P20T. The annual gross income is expected to average P50k & annual expenses is P5T. If capital is earning 10% determine if this is a desirable investment using annual cost method, what is the net cost.A store plans on investing on a new grill oven that costsP100,000. It will generate revenues of P2,500 per dayand expenses of P800 per day. Suppose the store will beoperating 320 days in a year. Evaluate the acceptabilityof this investment if the grill oven will have a lifespan ofsix years and MARR is 10% per year. Use PW method.What is IRR?A machine cost 80,000 and the salvage value after 20 years is 20,000. Find the equivalent annual worth cost if the annual operating cost is 18,000 and money is worth 10% per year.