ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Question
Chapter 8, Problem 38P
To determine
To select: The best alternative using challenger-defender
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A Company is contemplating the purchase of a new milling machine. The purchase price of the new machine is $60,000 and its annual operating cost $2,675.40. The machine has a life of seven years with no salvage value, and it is expected to generate $18,000 in revenue in each year of its life. What is the rate of return of the investment in this machine if the interest rate is 8% per year?
Select one:
a. 10.18%
b. 14.33%
c. 12.66%
d. 15.25%
An energy management system that can save $8,040 per year for four (4) years, expenses are $2,000 per year, can be installed at a cost of $20,000. At the end of four (4) it is expected to be sold
for $1,250. Using the end of year convention, the rate of return on this planned investment is most nearly:
1.ROR = 9.81%
2. ROR = 10%
03. ROR = 9.5%
04.ROR = 6%
Question 4
Consider a proposal to enhance production of tortillas en a
taqueria.
The new machine is estimated to cost $30 million and will
incur an additional $1 million per year in maintenance costs.
The machine will produce annual savings of $6 million each
year.
The Minimum acceptable rate of return (MARR) is 11% per
year, and the study period is five years at which time the
machine will be obsolete (worthless).
What is the maximum (minimum) value of maintenance cost
that reverse your decision? Write 4 decimals
Chapter 8 Solutions
ENGR.ECONOMIC ANALYSIS
Ch. 8 - Prob. 1QTCCh. 8 - Prob. 2QTCCh. 8 - Prob. 3QTCCh. 8 - Prob. 4QTCCh. 8 - Prob. 5QTCCh. 8 - Prob. 1PCh. 8 - Prob. 2PCh. 8 - Prob. 3PCh. 8 - Prob. 4PCh. 8 - Prob. 5P
Ch. 8 - Prob. 6PCh. 8 - Prob. 7PCh. 8 - Prob. 8PCh. 8 - Prob. 9PCh. 8 - Prob. 10PCh. 8 - Prob. 11PCh. 8 - Prob. 12PCh. 8 - Prob. 13PCh. 8 - Prob. 14PCh. 8 - Prob. 15PCh. 8 - Prob. 16PCh. 8 - Prob. 17PCh. 8 - Prob. 18PCh. 8 - Prob. 19PCh. 8 - Prob. 20PCh. 8 - Prob. 21PCh. 8 - Prob. 22PCh. 8 - Prob. 23PCh. 8 - Prob. 24PCh. 8 - Prob. 25PCh. 8 - Prob. 26PCh. 8 - Prob. 27PCh. 8 - Prob. 28PCh. 8 - Prob. 29PCh. 8 - Prob. 30PCh. 8 - Prob. 31PCh. 8 - Prob. 32PCh. 8 - Prob. 33PCh. 8 - Prob. 34PCh. 8 - Prob. 35PCh. 8 - Prob. 36PCh. 8 - Prob. 37PCh. 8 - Prob. 38PCh. 8 - Prob. 39PCh. 8 - Prob. 40PCh. 8 - Prob. 41PCh. 8 - Prob. 42PCh. 8 - Prob. 43PCh. 8 - Prob. 44PCh. 8 - Prob. 45P
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