Question 8Milliken uses a digitally controlled dyer for placing intricate patterns on manufactured carpet squares for home and commercial use. It is purchased for $400,000. Itsmarket value will be $310,000 at the end of the 1st year and drop by $46,000 per year thereafter to a minimum of $30,000. Operating costs are $20,000 the 1st year,increasing by 8% per year. Maintenance costs are only $8,000 the 1st year but will increase by 35% each year thereafter. Milliken's MARR is 20%. Determine theoptimum replacement interval for the dyer.Year(s)

Given: Variables in the question:Initial cost=$400,000Market value at the end of 1st…

Answered: Question 8 Milliken uses a digitally…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Question 2: An item may be bought for a price of $12 a piece. Making it would require buying a machine for $60,000 to be paid now, and running expenses of $5,000 per year to be paid at the end of each year. In addition to these fixed expenses, raw material cost is $5 per piece. What is the maximum annual demand for which buying is better than making? Assume that the vendors get paid at the end of the year. Also, assume that the machine has a useful life of 5 years with a salvage value of 15,000. Use i of 11%.
Anderson Inc. uses packing machines to prepare their product for shipping One machine costs $136,000 and lasts about 5 years before it needs to be replaced. The operating cost per machine is $6.000 a year ignoring taxes, what is the equivalent annual cost of one packing machine if the required rate of return is 12%? Multiple Choice $43,208 $51.036 $43728
Question 1 LUMU has demand for 1400 water pumps each year. The cost of a water pump to LUMU is $400. Inventory carrying cost is estimated to be 20% of the unit cost and the ordering cost is $25 per order. If the owner orders in quantities of 300 or more, he can get a 5% discount on the pumps, Should LUMU accepts the quantity discount?
Milliken uses a digitally controlled dyer for placing intricate patterns on manufactured carpet squares for home and commercial use. It is purchased for $400,000. Its market value will be $310,000 at the end of the 1st year and drop by $48,000 per year thereafter to a minimum of $30,000. Operating costs are $20,000 the 1st year, increasing by 10% per year. Maintenance costs are only $8,000 the 1st year but will increase by 37% each year thereafter. Milliken's MARR is 18%. Determine the optimum replacement interval for the dyer. Year(s)
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Milliken uses a digitally controlled dyer for placing intricate patterns on manufactured carpet squares for home and commercial use. It is purchased for $400,000. Its market value will be $310,000 at the end of the 1st year and drop by $44,000 per year thereafter to a minimum of $30,000. Operating costs are $20,000 the 1st year, increasing by 7% per year. Maintenance costs are only $8,000 the 1st year but will increase by 37% each year thereafter. Milliken’s MARR is 20%. Determine the optimum replacement interval (years) for the dyer
Subject: Engineering Economy Topic: Selection in Present Economy The monthly demand for ice cans being manufactured by Mr. Cruz is 3,500 pieces. With a manually operated guillotine, the unit cutting cost is P25.00. If an automatic hydraulic guillotine at a price of P305,000 is being used he will cut by 30% the unit cutting cost. Disregarding the cost of money, how many months will Mr. Cruz be able to recover the cost of the machine if he decides to buy now?
Question No.6: An auto parts supplier sells Hardy-brand batteries to car dealers and auto mechanics. The annual demand is approximately 1500 batteries. The supplier pays 25 R.O for each battery and estimates that the annual holding cost is 30% of the battery's value. It costs approximately 30 R.o to place an order. The supplier currently orders 125 batteries per month. a. Determine the EOQ. b. How many orders will be placed per year using the EOQ? c. Determine the total cost for the current order quantity. d. Determine the total inventory cost for the EOQ, How has ordering cost changed?
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