Solve the following problems. Draw corresponding flow chart. A certain service can be performed satisfactorily by a new process, which has a capital investment cost of P400,000.00, an estimated life of 10 years, no market value, and annual receipts of P120,000. Assuming a MARR of 18%, find the Future Worth of this process and specify whether you would recommend it.
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- a company is considering the purchase of a new Lathe, where there are 3 alternative Lathes with brands D, E and F with economic value for each Lathe as follows; Lathe Machine D Lathe Machine E Lathe Machine F Initial Cost (Million Rp) 530 540 480 Maintenance Cost (MillionRp) 90 80 100 Residual Value (Million Rp) 60 130 80 Operating Life 10 10 10 Question: Do a Present Worth Analysis to be able to determine the Alternative chosen from the three Generators with MARR = 13%?CB Electronix must buy a piece of equipment to place electronic components on the printed circuit boards it assembles. The proposed equipment has a 10-year life with no scrap value. The supplier has given CB several purchase alternatives. The first is to purchase the equipment for $950,000. The second is to pay for the equipment in 10 equal installments of $125,000 each, starting one year from now. The third is to pay $210,000 now and S85,000 at the end of each year for the next 10 years. Complete parts (a) and (b) below. a. Which alternative should CB choose if its MARR is 11 percent per year? Use an IRR comparison approach. Considering the alternatives in the order of lowest first cost, the best option is the which has an incremental rate of return of %. (Type an integer or decimal rounded to two decimal places as needed. Use an approximate ERR if the IRR cannot be used.)Mary, a project manager for ABC Ic., is reviewing a product quality improvement project. She has determined that the project's Annual Worth of $3,396. for a period of 8 years. She now has to calculate the IRR for the project but unfortunately she has lost some information about the cash flows. She knows only that the project has: a 8-year project life with an initial cost of $400,000. a set of equal revenue cash flows occurred at the end of each year for 8 years, and • MARR used for calculation the Annual Worth was 8%. Find the annual revenue first and then calculate the IRR for the project = ? O 14% < IRR (i*) < 15% O 13% < IRR (i*) < 14% O 10% < IRR (i*) < 11% O 9% < IRR (i*) < 10% O 8% < IRR (i*) < 9%
- Deere Construction just purchased a new track hoe attachment costing $12,500. The CFO, John,expects the implement will be used for five years when it is estimated to have a salvage value of$4,000. Maintenance costs are estimated to be $0 the first year and will increase by $100 eachyear thereafter. If a 12% interest rate is used, what is the equivalent uniform annual cost of theimplement?Two numerically controlled drill presses are being considered by the production department of Zunni's Manufacturing; one must be selected. Comparison data is shown in the table below. MARR is 10%/year. Drill Press T Drill Press M Click here to access the TVM Factor Table Calculator Part a Initial Investment Estimated Life Estimated Salvage Value Annual Operating Cost Annual Maintenance Cost What is the future worth of each drill press? Drill Press T: $ Drill Press M: $ $20,000 10 years $5,000 $12,000 $2,000 $30,000 10 years $7,000 $6,000 $4,000 Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±20.Engineering Economy Calculate the Annual Worth and Cash flow Diagram. DON'T USE EXCEL You bought a new car which you intend to use as a public utility vehicle for P950,000. The expected life of the car is ten (10) years for its intended use. Your driver and you agreed that for the first five (5) years , your “boundary” is P1,500.00 per day and P1,000.00 per day for the rest of its economic life. You also expected a repair and maintenance costs of P30,000 every six (6) months from year one (1) to five (5) and P50,000 from year six (6) to ten (10). At the end of 10 years you can sell the car for P100,000. If your MARR on invested capital is 15% every (6) months, determine whether this is a good investment. Use the Annual Worth , Present Worth , or the Future Worth method in your solution. Indicate all other assumptions you use in your analysis.
- A company is considering the purchase of a fleet of % ton pickup trucks for their contracting business. The owner is trying to decide whether to purchase the trucks with diesel or gas engines. The company specifies an intermal rate of return on equipment purchases of 6% . The owner estimates the following cash flows of costs for a gas and diesel equipped truck. What is the EUAC of the Diesel Truck? Gas Diesel Purchase Purchase Year Fuel Fuel Maintain Maintain $30,000 $250 $300 $39,000 $6,750 $5,000 $1,000 $5,000 $1,500 1 $500 $6,750 $6,750 2 3 $350 $5,000 4 $400 $6,750 $2,000 $5,000 $2,500 $5,000 $3,000 $5,000 $3,500 $5,000 $4,000 | $5,000 5 6. Note: no need to find the common useful life when using EUAC.Empire Limited is trying to decide between two machines which are necessary in their manufacturing facility. Data concerning the two machines are presented below. If the company has a minimum attractive rate of return (MARR) of 10%, which machine should be chosen? Use co-terminated assumption (5 years) and compare using Present Worth Method. Machine A Machine B First Cost $45,000 $24,000 Annual Operating Cost $31,000 $35,000 Salvage Value $10,000 $8,000 Useful life 8 years 5 years a. The Present Worth of Alternative A is = $ Blank 1 b. The Present Worth of Alternative B is = $ Blank 2 c. Choose Alternative (Type only A or B) = Blank 3 Note: Show final answer to the nearest WHOLE NUMBER. No need to write the Unit of Measure. Blank 1 Add your answer Blank 2 Add your answer Blank 3 Add your answerTwo numerically controlled drill presses are being considered by the production department of Zunni's Manufacturing; one must be selected. Comparison data is shown in the table below. MARR is 10%/year. Drill Press T Drill Press M Click here to access the TVM Factor Table Calculator Part a * Your answer is incorrect. Initial Investment Estimated Life Estimated Salvage Value Annual Operating Cost Annual Maintenance Cost What is the future worth of each drill press? Drill Press T: $ Drill Press M: $ 40000 60000 $20,000 10 years $5,000 $12,000 $2,000 $30,000 10 years $7,000 $6,000 $4,000 Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±20.
- If you have the present worth of an alternative with a 5-year life, you can obtain its annual worth by:a. multiplying the PW by i.b. multiplying the PW by (A/F,i,5).c. multiplying the PW by (P/A,i,5).d. multiplying the PW by (A/P,i,5).A firm is considering the purchase of a new machine to increase the output of an existing production process. If each of these machines provides the same service over their useful lives and the MARR is 15%, Initial Investment Annual Cost Market Value at End of Useful Life Useful Life 5 years 20 years a) Which machine would be selected on the basis of repeatability assumption? b) Using co-terminated assumption with a 5 year study period (compute imputed market value for alternative B), which alternative is preferred? c) If perpetual service life is assumed, which of these alternatives do you recommend? a) Using Repeatability: AWA=$Blank 1 and AWB-$Blank 2 b) Using Co-terminated: AWA-SBlank 3 and AWB=$Blank 4 c) Capitalized Cost: CCA-SBlank 5 and CCB-$Blank 6 Blank 1 Note: For Equivalent Worth, round off your final answer to whole number. For Rate of Return, round off to two decimal places (in percentage). Blank 2 Blank 3 Alternative A $14,000 $14,000 $8,000 Blank 4 Blank 5 Blank 6 Add…Question 3 A project with the following costs are under consideration to determine its profitability. Using the IRR comparison, and an annual MARR of 10% compounded semiannually, determine if the project should be executed First cost $45,000 Semiannual operating cost $10,000 Semiannual income $20,000 Salvage value $20,000 Life in years 4 years Oa. IRR = 17% semiannual Ob. IRR= 18.7% semiannual O IRR = 16.9% semiannual Od. IRR 15.3% semiannual