The replacement of a planing machine is being considered by the Reardorn Furniture Company. (There is an indefinite future need for this type of machine.) The best challenger will cost $30,000 for installation and will have an estimated economic life of 12 years and a $2,000 MV at that time. It is estimated that annual expenses will average $16,000 per year. The defender has a present BV of $6,000 and a present MV of $4,000. Data for the defender for the next three years are as follows: BV at End of Year MV at Expenses during the End of Year Year Year $3,000 2,500 2,000 $4,500 3,000 $20,000 25,000 30.000 2 1.500
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- The replacement of a planning machine is being considered by the Reardorn Furniture Company. (There is an indefinite future need for this type of machine.) The best challenger will cost $30,000 for installation and will have an estimated economic life of 11 years and a $2,000 MV at that time. It is estimated that annual expenses will average $15,500 per year. The defender has a present BV of $6,000 and a present MV of $3500. Data for the defender for the next three years are given below. Using a before-tax interest rate of 10% per year, make a comparison to determine whether it is economical to make the replacement now. Year MV at End of BV at End of Expenses during Year Year the Year $18,000 25,000 S- 1,500 $4,500 2 - 1,750 3,000 3 -2,000 1,500 32,000 Click the icon to view the interest and annuity table for discrete compounding when i 10% per year. Fil in the table for the EUAC values for the defender for years 1-3. (Round to the nearest dollar.) Year EUAC $25350 $24755 3 $ 25758The replacement of a planning machine is being considered by the Reardon Furniture Company. (There is an indefinite future need for this type of machine.) The best challenger will cost $25,000 for installation and will have an estimated economic life of 14 years and a $1,500 MV at that time. It is estimated that annual expenses will average $16,000 per year. The defender has a present BV of $5,500 and a present MV of $4000. Data for the defender for the next three years are given below. Using a before-tax interest rate of 12% per year, make a comparison to determine whether it is economical to make the replacement now. Year MV at End of BV at End of Expenses during Year 1 $3,000 Year $4,125 the Year $20,000 2 2,750 2,750 26,000 3 2,500 1,375 32,000 Click the icon to view the interest and annuity table for discrete compounding when i = 12% per year. Fill in the table for the EUAC values for the defender for years 1-3. (Round to the nearest dollar.) Year EUAC 1 2 3: A machine was purchased and installed 6 years ago for $50000 with a useful life of 10 years. The salvage value is now $5500 and decreasing at a rate of $500 per year. The machine has a maintenance cost of $2000 per year. Assuming a 12.4% MARR, should the company replace the machine this year with a potential new machine that has a EUAC of $3000 per year? (show your work)
- Economics A commercial 3D printer is purchased for $310,000. The salvage value of the printer decreases by 45% each year that it is held. The cost to operate and maintain the machine the first year it is used is $12,000; these costs increase by $5,500 each year. What is the optimal replacement interval and minimum EUAC for the printer, assuming a MARR of 11% is used? ORI: years EUAC*: $From the data shown, determine the ESL of the challenger. Years Retained 1 2 3 4 5 AW of the Defender, $ -145,000 -106,000 -95,000 -93,000 -96,000 a) n = 2 years b) n = 1 year c) n = 3 years d) n = 4 years e) n = 5 years AW of the Challenger, $ -136,000 -126,000 -99,000 -95,000 -98,000An $80,000 baling machine for recycled paper was purchased by the XYZ company two years ago. The current MV of the machine is $50,000, and it can be kept in service for seven more years. MARR is 12% per year and the projected net annual receipts (revenues less expenses) and end-of-year market values for the machine are shown below. When is the best time for the company to abandon this project? END OF YEAR 1 2 3 4 5 6 7 Net annual receipts $20,000 $20,000 $18,000 $15,000 $12,000 $6,000 $3,000 Market value 40,000 32,000 25,000 20,000 15,000 10,000 5,000
- Kappa Holdings is looking at a new system with an installed cost of $740,000. This cost will be depreciated straight-line to zero over the project's 7-year life, at the end of which the system can be salvaged for $102,000. The system will save the firm $217,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $69,000, which will be returned at the end of the project. If the tax rate is 22 percent and the discount rate is 9 percent, what is the NPV of this project? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) NPVAn existing robot can be kept if $2,000 is spent now to upgrade it for future service requirements. Alternatively, the company can purchase a new robot to replace the old robot. The following estimates have been developed for both the defender and the challenger. Defender Challenger Current MV…It is desired to determine the resent economic Value of an old machine by considering of how it compares with the best modern machine that could replace it. The old machine is expected to require out of pocket cost of 85,000 each year for 4 years and then be scared for 5,000 residual value. The new machine requires an investment of 40,000 and would have out of the pocket costs of 79,000 a year for 8 years and the zero-salvage value. Invested capital should earn a minimum return of 15% before taxes. Determine the present value of an old machine.
- K An old forklift is due for a replacement analysis. It has a current market value $10,000. The market values and operation and maintenance costs for each of the remaining years of service are given below. The MARR is 17% per year. (a) Complete the table of marginal costs of the old forklift for each of the remaining years of service. (b) If the challenger has a minimum EUAC of $7,415, answer the two additional questions. Year 1 2 3 4 (a) Fill in the table below. (Round to the nearest dollar.) Forklift (Defender) MV at EOY Year 1 2 3 4 $6,000 5,000 4,000 2,000 Click the icon to view the interest and annuity table for discrete compounding when MARR = 17% per year. O&M Costs $4,000 4,000 4,500 5,500 Marginal Cost $ $ SA SA $A 10-year-old backup power system is being considered for early replacement. Its current market value is $16,000. Estimated future market values (MV) and annual operating costs (AOC) for the next 5 years are given in the following table. What is the economic service life of this defender if the interest rate is Z% per year using AW analysis? Year MV AOC 1 10000 -5000 8000 -6500 6000 -8000 4 2000 -9500 -12500 [Hint: the value of Z = |last digit of your unique id+2nd digit of your unique id], Example: if your id is 201-021-651 then Z = |1+2| = 3.00%, so, interest rate will be 3.00%) 3.$250,000 is invested in equipment having a salvage value equal to $250,000(0.80n) after n years of use. O&M costs equal $60,000 the first year and increase $8,000 per year. Based on a MARR of 10%, what are the optimum replacement interval and minimum EUAC?