No written by hand solution Question 1:The data for new and used machines are shown below:Used machineQuestion 2:Initial cost($)Annual operating cost ($/year)Salvage value ($)Life (years)Use an interest rate of 10% per year. Find1. The present worth of the new machine?2. To compare the machines on the basis of a present worth analysis, calculate the present worth valuesof both machines15,0008,0005,000New machine340,0002,00010,00061. A company is considering two alternatives for manufacturing a certain part. Method R will have a firstcost of $40,000, an annual operating cost of $25,000, and a $10,000 salvage value after its five year life.Method S will have an initial cost of $100,000, an annual operating cost of $15,000, and a $12,000salvage value after its 10 year life. At an interest rate of 12% per year, find the present worth values ofthe two alternatives2. For the alternatives calculate their annual worth values

The present worth is the discounted value of a series of future cash flows. It represents the values…

The data for new and used machines are shown below: Initial cost($) Annual operating cost ($/year) Salvage value ($) Used machine 15,000 8,000 5,000 New machine 3 40,000 2,000 10,000 Life (years) Use an interest rate of 10% per year. Find 1. The present worth of the new machine? 2. To compare the machines on the basis of a present worth analysis, calculate the present worth values of both machines 6

The data for new and used machines are shown below: Initial cost($) Annual operating cost ($/year) Salvage value ($) Used machine 15,000 8,000 5,000 New machine 3 40,000 2,000 10,000 Life (years) Use an interest rate of 10% per year. Find 1. The present worth of the new machine? 2. To compare the machines on the basis of a present worth analysis, calculate the present worth values of both machines 6

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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! Required information The Briggs and Stratton Commercial Division designs and manufacturers small engines for golf turf maintenance equipment. A robotics-based testing system with support equipment will ensure that their new signature guarantee program entitled "Always Insta- Start" does indeed work for every engine produced. First cost of equipment AOC per Year Salvage Value Estimated Life Pull System $-1,550,000 $-620,000 $90,000 8 years Push System $-2,650,000 $-620,000 $50,000 8 years Compare the annual worth of the two systems at MARR = 11% per year. Select the better system. The (Click to select) is determined to be the better system. (Click to select) pull system push system
! Required information The Briggs and Stratton Commercial Division designs and manufacturers small engines for golf turf maintenance equipment. A robotics-based testing system with support equipment will ensure that their new signature guarantee program entitled "Always Insta-Start" does indeed work for every engine produced. First cost of equipment AOC per Year Salvage Value Estimated Life Pull System $-2,000,000 $-700,000 $110,000 8 years Push System $-2,700,000 $-440,000 $70,000 8 years Determine the salvage value for the push system that will make the company indifferent to the two systems. Also, MARR = 9% per year. The salvage value for the push system is determined to be $ in $1000 units.
! Required information The Briggs and Stratton Commercial Division designs and manufacturers small engines for golf turf maintenance equipment. A robotics-based testing system with support equipment will ensure that their new signature guarantee program entitled "Always Insta-Start" does indeed work for every engine produced. First cost of equipment AOC per Year Salvage Value Estimated Life Pull System $-1500000 $-700000 $100000 8 years Push System $-2250000 $-600000 $50000 8 years Determine the salvage value for the push system that will make the company indifferent to the two systems. Also, MARR = 10.00% per year. The salvage value for the push system is determined to be $ Tin $1000 units.
Economics Last year, a decision was made to keep the same equipment in lieu of buying new equipment. The old equipment's trade-in value last year was $4000 and its value this year is $2000. The operating cost was $700 last year. If bought last year, the new equipment would have cost $13K, the salvage value after 8 years would be $2000, and it would have an annual operating cost of $4000. If bought last year, what would have been the EUAC of the new equipment (in dollars) at 16% interest rate per year? (provide your answer in the box as a negative value if you arrive at costs) What would have been the correct decision? (provide your answer and justification in your pdf file submission)
! Required information The Briggs and Stratton Commercial Division designs and manufacturers small engines for golf turf maintenance equipment. A robotics-based testing system with support equipment will ensure that their new signature guarantee program entitled "Always Insta-Start" does indeed work for every engine produced. First cost of equipment AOC per Year Salvage Value Estimated Life Pull System $-1,500,000 $-700,000 $100,000 Push System $-2,250,000 $-600,000 $50,000 8 years 8 years Determine the salvage value for the push system that will make the company indifferent to the two systems. Also, MARR = 10% per year. The salvage value for the push system is determined to be $ in $1000 units.
5. A small branch office of a contracting company is planning to purchase a new laser printer. Three vendors have supplied cost, useful life, and estimated salvage value data, shown in the following table. The MARR is 12%. Investment (first) cost Annual service cost Salvage value Useful life A $800 $180/yr $200 5 years Laser printer B $1,400 $150/yr $825 5 years C $900 $170/yr $100 5 years Draw cash flows for these alternatives. If the expected annual saving in labor is $500 regardless of which machine is purchased, what are the annual equivalent values of these alternatives.
solve it manually; do not use excel A steel pedestrian overpass must either be reinforced or replaced. Reinforcement would cost $25,000 and would make the overpass adequate for an additional 6 years of service. If the overpass is torn down now, the scrap value of the steel would exceed the removal cost by $15,000. If it is reinforced, it is estimated that its net salvage (market) value would be $18,000 at the time it is retired from service. A new pre-stressed concrete overpass would cost $140,000 and would meet the foreseeable requirements of the next 40 years. Such a design would have no net scrap or MV. It is estimated that the annual expenses of the reinforced overpass would exceed those of the concrete overpass by $3,200. Assume that money costs the state 8% per year and that the state pays no taxes. What would you recommend?
! Required Information The Bureau of Indian Affairs provides various services to American Indians and Alaska Natives. The Director of Indian Health Services is working with chief physicians at some of the 230 clinics nationwide to select the better of two medical X-ray system alternatives to be located at secondary-level clinics. X-Ray Systems First cost, $ Annual operating cost, $/year Overhaul In year 3, $ Overhaul in year 4, $ Salvage value, $ Expected life, years Del Medical Siemens -210,000 -184,000 -191,000 -195,000 -26,000 -140,000 50,000 10,000 6 At 5% per year, select the more economical system. Solve using tabulated factors. The present worth of Del Medical is $-| 831620 and the present worth of Siemens is $- The more economical system is (Click to select) ▼
Financial information about graders planned to be purchased is presented in the table below. Calculate the net present values of the machines with the least common multiple (LCM) approach. Choose the economically most suitable grader. MARR is specified as 16%. Purchase costs (TL) Annual repair-maintenance cost (TL) Major repair-maintenance (TL) Annual income (TL) Salvage value (end of 4th year) (TL) Economic life (years) Machine A 220.000+ 12.500*X 5.000 15.000 (at 3rd year) 110.000+ 2.000*Y 50.000 4 Machine B 300.000 + 14.500*Y 3.500 12.000 (at 3rd year) 140.000 + 1.200*X 70.000 6
Rerform an EAC analysis and evaluate what decision to make regarding 2 challengers and 1 defender. Elaborate:a) Graphsb) EAC analysisc) Conclude the exercise and make a decision regarding the results Machine N1 (#1 challenger) useful life = 8 years Initial Cost $15,000 MARR 18% Year Operating costs Market value EAC 1 $ 355.00 $ 8,000.00 2 $ 500.00 $ 7,000.00 3 $ 788.00 $ 6,000.00 4 $ 1,000.00 $ 5,000.00 5 $ 1,355.00 $ 4,000.00 6 $ 1,688.00 $ 3,000.00 7 $ 2,012.00 $ 1,000.00 8 $ 2,345.00 $ 0.00
6. Electrical switch manufacturing companies must choose one of three different assembly methods. Method A will have an initial cost of $40,000, annual operating costs of $9,000, and a 2 year lifetime. Method B will cost $80,000 to purchase and will have an annual operating cost of $6,000 over its 4 year service life. Method C will cost $130,000 initially with an annual operating cost of $4,000 over its 8 year life. Methods A and B will have no salvage value, but method C will have a salvage value for some equipment that is approximately $12,000. Which method to choose? Use present value analysis at an interest rate of 10% per annum if the alternatives are mutually independent A. A and B B. B and C C. C D. There is no economically feasible solution Please solve based the option max 15 minutes ASAP
Who doesn't love food trucks? Imagine you are being offered to invest in a food truck as part of a restaurant business. The truck including equipment costs $100,000, has an expected useful lifespan of 10 years, and the estimated salvage value then is $5,000. The food truck will require a $20,000 overhaul after 6 years of use. The food truck costs $5000 per year to operate and maintain, but it will save the underlying restaurant operator $40,000 per year in labour and lease payments. As you are contemplating the offer you evaluate the economics of this idea... Your cost of borrowing money is 10%. You set yourself an MARR of 14%. What should you do? Invest or not? a) Use a timeline graph to summarize cash outflows and inflows over time. b) Conduct the ERR analysis. Explain each step of your analysis and related assumptions. Report the level of ERR for this proposal and discuss whether or not you (the decision maker) should invest?