For equipment that has a first cost of $10,500, the estimated operating costs and year-end salvage values are as shown.YearOperating Cost, $Salvage Value, $1-1,0007,0002-1,2005,0003-1,3004,5004-2,0003,00015-3,0002,000Determine the economic service life ESL, at /= 10% per year using factors.The economic service life ESL, is4 years with the AW = $-|

The initial cost P=10500. The salvage value and annual cost change each year. The table below shows…

For equipment that has a first cost of $10,500, the estimated operating costs and year-end salvage values are as shown. Year Operating Cost, $ Salvage Value, $ 1 2 -1,000 7,000 -1,200 5,000 -1,300 4,500 4 -2,000 3,000 5 -3,000 2,000 Determine the economic service life ESL, at /= 10% per year using factors. The economic service life ESL, is 4 years with the AW = $-

For equipment that has a first cost of $10,500, the estimated operating costs and year-end salvage values are as shown. Year Operating Cost, $ Salvage Value, $ 1 2 -1,000 7,000 -1,200 5,000 -1,300 4,500 4 -2,000 3,000 5 -3,000 2,000 Determine the economic service life ESL, at /= 10% per year using factors. The economic service life ESL, is 4 years with the AW = $-

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

For equipment that has a first cost of $17,500, the estimated operating costs and year-end salvage values are as shown. Year Operating Cost, $ Salvage Value, $ 1 −1,000 7,000 2 −1,200 5,000 3 −1,300 4,500 4 −2,000 3,000 5 −3,000 2,000 Determine the economic service life ESL, at i = 10% per year using factors. The economic service life ESL, is ___ years with the AW = $___−
New microelectronics testing equipment was purchased 2years ago by Mytesmall Industries at a cost of $600,000. Atthat time, it was expected to be used for 5 years and thentraded or sold for its salvage value of $75,000. Expandedbusiness in newly developed international markets is forcingthe decision to trade now for a new unit at a cost of$800,000. The current equipment could be retained, ifnecessary, for another 2 years, at which time it would have a$5000 estimated market value. The current unit is appraisedat $350,000 on the international market, and if it is used foranother 2 years, it will have M&O costs (exclusive ofoperator costs) of $125,000 per year. Determine the valuesof P, n, S, and AOC for this defender if a replacementanalysis were performed today. P = market value =$350,000AOC = $125,000 per yearn = 2 yearsS = $5,000
Matchim's Paving is investing in a new wider paving machine that will cost $131000, which is expected to return $22500 per year of the next 12 years. At the end of the 12 years the paving machine is expected to have a salvage value of $20000. Assuming the cash flow is at the end of the year, what is the Pay Back Period, in years, for the project?
An expansion of the current BIM (Building Information Model) software has been proposed to First Financial, the building’s owner. A total installed cost of $120,000 is expected to generate additional savings of $40,000 per year for 10 years, after which time the software will be replaced with no salvage value. The annual M&O cost is expected to be $10,000 the first year and increase by an arithmetic gradient G between $1000 and $5000 per year thereafter. Determine if the expanded BIM is sensitive to gradient increases of $1000 (optimistic), $3000 (most likely), and $5000 (pessimistic) per year. Use AW analysis and a MARR of 10% per year.
A piece of equipment has a first cost of $60000, a maximum useful life of 4 years, and a market (salvage) value described by the relation Sk = 48000 – 8400k, where k is the number of years since it was purchased. The AOC series is estimated using AOC = 24000 + 3600k. The interest rate is 9% per year. When should the company replace this asset?
An old machine cost P48,000.00 a year to maintain. What expenditures for anew machine is justified if no maintenance will be acquired for the first 3 years,P12,000.00 per year for the next 7 years, and P48,000 a year thereafter?Assume money to cost 4% compounded annually and no other costs to beconsidered.
The mining company is considering purchasing a machine which costs $30000 and is expected to last 12 years with a $3000 Salvage value. The annual operating expenses are expected to be $9000 for the first 4 years, but owing to decreased use, the operating costs will decrease by $400 per year for the next 8 years. Alternatively, the company can prirchase a highly automated machine at a cost of $58000. This machine will last only 6 years because of its high technology. and delicate design, and its salvage value will be $15000. Because it it is so automated, its operating cost will be only $4.000 per year. If the company's minimum attractive fate of return is 20% per year, which Machine should be selected on the basis of present worth analysis?
An in place machine has an equivalent annual worth of $-100000 for each year of its maximum remaining useful life of two years. A suitable replacement is determined to have equivalent annual worth values of $-175000, $-125000, and $-150000 per year if kept for 1,2, or 3 years, respectively. When should the company replace the machine, if it uses a fixed 3-year planning horizon? Use an interest rate of 17.255609824% per year compounded semiannualy.
QBS company wishes to replace its current equipment that was purchased 8years ago with the newer technology. System A will have a first cost of P1.6M, an operating cost of p70,000 per year, and a salvage value of P400,000 after its 4-year life. System B will have a first cost of P2.1M, an operating cost of P50,000 the first year with an expected increase of P3,000 per year thereafter, and no salvage value after its 8-year life. On the basis of a future worth analysis at an interest rate of 12% per year, write the: ANSWER for ALTERNATIVE A: ANSWER for alternative B:
ASAP PLZ An industrial plant bought a generator set for P125,000. Other expenses including instalment amounted to P35.000. The generator set is to have a life of 17 years with a salvage value at the end of life of P4,000. In what year did the book value of the generator set equal or almost equal to half of the cost of the equipment, use SYD method. (ENGINEERING ECONOMY)
A CERTAIN MACHINERY COST P50,000.00 AND WILL LAST FOR 12 YEARS WITH SALVAGE VALUE OF P5000.00. THE OWNER WANTS TO SELL IT AFTER 5 YEARS OF USE. FIND THE SELLING PRICE OF THE MACHINE SO THAT HE WILL NOT LOSE OR GAIN FINANCIALLY IN THE TRANSACTION BY USING SINKING FUND METHOD AT 5% COST OF MONEY.
Two processes are being considered for the production of a machine part. Process 1 requires an equipment cost of P180 000.00, a yearly operating cost of P90 000.00, and has zero salvage value at the end of its 6-year life. Process 2 has corresponding figures of P320 000.00, P72 000.00, P45 000.00 and 9-year life. If the applied MARR is 20%, compare the two processes using PW analysis. (Ans. PT1 = -P693 567.36; PT2= - P718 084.62)- Please use and actual formula NOT AN EXCEL PLEASE. We are students not office workers.