A $20,000 machine will be purchased by a company with an MARR of 10%. It will cost $5,000 to install and removal costs are insignificant. What is its economic life and minimum EUAC cost given the following O&M costs: Their is on salvage value including in the problem YR, n O&M 2 3 4 $5,000 $8,000 $11,000 $14,000 $17,000
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- uppose that you purchased a HVAC system five years ago for $75, 000. The O&Mcosts are $15, 000 this year and are expected to increase by $1, 000 each year for the next five yearsthen remain the same for the following years.The current salvage value of the system is $15, 000; salvage value after one year is estimated tobe $12, 000; after two years, $11, 000; after three years, $10, 000; after four years, $9, 000; and so on.A new industrial HVAC system is available for purchase at a price of $95, 000, including instal-lation. The market value of the new system will decrease at a rate of 15% each year. The O&Mcosts are expected to be $1, 000 in the first year, and will increase at a rate of 20% each year. Themaximum service life of the new system is 10 years. Assume that your company uses an interestrate of 10% for all project evaluations.(a) Find the remaining economic life of the currently owned asset.(b) What is the economic service life of the new system?(c) Use the…Question 5 Cost data of a machine is shown in the following table with an annual rate of 12%. Calculate annual worth at end of year 2 M&O cost Retention Yr. Market Value per year O First Cost) 55,000 1 35,000 45.000 2 20,000 47.500 3 15,000 50.000 4 2.000 53.500 O 6a256 O 69209 O R476 O 67.854 Question 6 Use same cost data from last question and 12% annual rate of return. Calculate annual worth at end of Year 3. O 66.765 O 64332 O 67.428 O 66256 D Question 7 Use the same cost data of the machine from the above 2 questions and 12% interest rate per year. What is the ESL of this machine? 01 04As a Project Engineering had been tasked to make an analysis and to recommend to yourcompany on the economic justification on option to purchase a new or 3-year old used truck tobe used for the company's project construction activities as well as providing some rentalbusiness for three years. As the truck is not used for the whole time, 5-days a month it is beingrented out. The new truck having better fuel efficiency and lower maintenance cost. Based onyour data gathering, you have this information derived for the analysis.(Refer to attached image) b) Based on Payback Period evaluation, which unit will you recommend to your management to be purchased and why?
- As a Project Engineering had been tasked to make an analysis and to recommend to yourcompany on the economic justification on option to purchase a new or 3-year old used truck tobe used for the company's project construction activities as well as providing some rentalbusiness for three years. As the truck is not used for the whole time, 5-days a month it is beingrented out. The new truck having better fuel efficiency and lower maintenance cost. Based onyour data gathering, you have this information derived for the analysis. (Refer to image attached) d) Based on the Minimum Acceptable Rate of Return, if the company hurdle rate is 20 %,would you choose a new lorry or used lorry and why?Machines that have the following costs are under consideration for a new manufacturing process. Compute the Equivalent Annual Worth with an interest rate of 8%, compounded semiannually. The machine last 4 years First cost $72,000 Semiannual Operating cost: $6,000 Semiannual incomes: $18,000 Salvage value: $9,000 O EAW $7.730 b. EAW $2,285 OCEAW $21,745 Od. EAW $318A small town is considering two potential alternatives for a garbage collection system. The following cost data has been compiled. If the interest rate is 6%, Compute the AB /AC ratio. Year System A System B 0 -$250,000 -$375,000 1-30 20,000 32,000 30 40,000 50,000 O 1.34 1.09 0.96 ○ 2.27
- 4. A small dozer is purchased for $110,000. A forecast of expected operating hours, salvage values, and maintenance expense is presented in the table Year Operating hours Salvage Maintenance expense 1 2000 82000 2250 2 1700 78000 2200 3 1500 75000 2100 4 1400 70000 2050 When the equipment should be changed based on the economic life cost analysis?Server Farms units in $M; OPEX increases by 4% per year after yr 1 Vacaciones Borrego Macondo 1st Cost 32 70 75 Yr. 1 OPEX 23 22 33 Salvage 10 15 28 Useful Life 6 12 4 Q's: 1. Provide a Graph of NPW of all options for the MARR vs Server Farms [range 1% to 15%] 2. What is the best option for a server farm at a rate of 10%? _ [insert name] 3. What is the best option for a server farm at a rate of 7%? _ [insert name] 4. At 10%, what is the profit for all three server farms if the graph below is the revenue for all three combined? Profit should be in PW and units are assumed $M. Use the life (N) that makes sense from a PW comparison of the server farms.Question 31 4) In order to make a replacement decision, a firm calculated the equivalent annual cost of owning an asset as follows: Replacement Period Salvage Value EAC Capital Costs Annual Repair EAC Repair Costs Costs 1 $1420 $1,287 2 $1,102 $1,082 $400 $189 3 $910 $976 S600 $298 4 S795 $812 S800 $437 O a. in 4 years O b. in 3 years Oc.in 1 year O d. in 2 years
- E2 A steel bridge on Louisiana state highway near the Gulf of Mexico is costing $450.000 yearlyin maintenance large chipping, priming, and painting. It originaly cost $1.600.000 when it wasbuilt 15 years ago. The Louisiana bridge engineers estimate that its remaining life is 10 years,then it will need to be replaced because of increased traffic. Its salvage value at any point intime is zero, because the cost of demolition will most like equal its value as scrap steel.A concrete bridge is considered to be the best challenger. It will cost $3.000.000 to build and$100.000 annually in maintenance costs. Its estimated life is 50 years. Its resale value may becounted as zero at any time during its life.No taxes of any kind will be considered for this government project. All costs are in constantdollars of year 0. Inflation may be ignored. Assume that annual benefits for either structure areexactly the same. A discount rate of 10 percent is to be used in analysis.(a) What is the economic life…Please solve in 30 min i will give you a upvote PROBLEM 2 Karim Inc. calculated the annual cost of owning an asset as follows. EUAC Annual EUAC Replacement Capital Repair Repair Year Costs Costs Costs $1,400 $1,100 1 2 $450 $200 3 $900 $600 $350 4 $800 $800 $400 $700 $1,000 $600 $1,300 $500 $1,600 $450 $600 7 $750 a. When should the company replace the equipment? b. If Karim Inc currently replaces its equipment every year to avoid increasing annual repair costs, how much can the company save annually?A piece of construction equipment cost $11200 fully installed. The annual maintenance costs and market values for each year k are listed in the table below. The firm uses an MARR of 8%. Use this information to answer the questions listed below. ΕΟY(k) 1 2 3 4 AE 950 1900 2850 3800 MV(k) 6700 4700 3200 2200 1700 Please calculate your answer to the nearest whole dollar. Format 0000 No commas If the textbook does not have a discount factor table for the MARR, use Excel to calculate the result. Discount factors are 4 decimal places. Format 0.0000 a) What is the useful life, N, of the equipment? years b) What is the best economic life of the equipment? years c) What is the EUAC that corresponds to your answer in part b? $