A 3-year-old manufacturing equipment, which has a present market value of $13,000, is being considered for early replacement. The estimated five-year market values and annual operating costs are shown below. The AW replacement values of year 1 and 2 have already been conducted, help the company determine the total AW₁ replacement value (year 3 only) which will consider how long the asset should be retained, its ESL. The interest rate is 10% per year. Year j (1) 12345 5 MV, (2) $9000 8000 6000 2000 0 AOC, (3) $-2500 -2700 -3000 <-3500 4500

A 3-year-old manufacturing equipment, which has a present market value of $13,000, is being considered for early replacement. The estimated five-year market values and annual operating costs are shown below. The AW replacement values of year 1 and 2 have already been conducted, help the company determine the total AW₁ replacement value (year 3 only) which will consider how long the asset should be retained, its ESL. The interest rate is 10% per year. Year j (1) 12345 5 MV, (2) $9000 8000 6000 2000 0 AOC, (3) $-2500 -2700 -3000 <-3500 4500

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

A piece of construction equipment will cost $6,000 new and will have an expected life of 8 years, with no salvage value at the end of its life. The disbursements for taxes, insurance, maintenance, fuels, and lubricants are estimated to be $1,500 for the first two years, $1,700 for the third, $1,900 for the fourth, and will continue to increase by $200 each year thereafter. a) Draw a fully labelled diagram to represent this cash flow. b) What is the equivalent Future Cost (FW) of this piece of equipment if the rate of interest is 12%?
Please help me
What would be the annual worth on this investment?
Please provide answer in 1 hr I will upvote
Required information For equipment that has a first cost of $10,500, the estimated operating costs and year-end salvage values are as shown. Year Operating Cost, $ Salvage Value, $ 1 -1,000 7,000 2 -1,200 5,000 3 -1,300 4,500 4 -2,000 3,000 5 -3,000 2,000 Determine the economic service life ESL, at i= 10% per year using factors. The economic service life ESL, is 4 O years with the AW $- 5982.12 =
An in place machine has an equivalent annual worth of $-100000 for each year of its maximum remaining useful life of two years. A suitable replacement is determined to have equivalent annual worth values of $-175000, $-125000, and $-150000 per year if kept for 1,2, or 3 years, respectively. When should the company replace the machine, if it uses a fixed 3-year planning horizon? Use an interest rate of 17.255609824% per year compounded semiannualy.
A large standby electricity generator in a hospital operating room has a first cost of $71,750 and may be used for a maximum of 6 years. Its salvage value, which decreases by 15% per year, is described by the equation S-71,750(1- 0.15), where n is the number of years after purchase. The operating cost of the generator will be constant at $9,250 per year, and the interest rate is 12% per year. Determine the economic service life and associated AW values. The economic service life is years and the AW value is $-
A computerized fabricating system has a first cost of $180,000, and an annual operating cost of $84,000 in years 1 and 2, increasing by $5,000 per year thereafter. The salvage value of the system is 25% of the first cost regardless of when the system is retired within the useful life of 5 years. Using a MARR of 15% per year, determine the annual worth of total cost when keeping the system for 2 years and 4 years.
A steam generation system at a biomass-fueled power plant uses an electrostaticprecipitator (ESP) to clean its gaseous effluents. The power plant has consistently made use ofthe same type of ESP over the past several years. The installed cost of a new ESP has beenrelatively constant at $100,000. Records of operation and maintenance expenses indicate thefollowing average expenses per year as a function of the age of the ESP. The MVs of the ESP arealso reasonably well known as a function of age. Data graph in image attached. Determine the best time to replace the ESP if the MARR is 15% per year.
complete solution, thank you
Please answer as quickly as possible and zoom in for better view
Please answer as quickly as possible and zoom in for clear view