A contractor has purchased a wheel loader for $115,000 and plans to use it 2,000 hours per year. The cost of one set of tires is $25,000. At this usage rate, the contractor anticipates disposing of the loader after using it for 10 years and realizing a salvage value of $35,000. The flywheel horsepower rating of the loader's diesel engine is 105 horsepower. The loader operator will earn $34.00 per hour including fringe benefits, and diesel fuel costs $1.20 per gallon. The interest rate is 10%. How much is the hourly oil and grease cost if the equipment operating factor is 0.5, crankcase capacity is 15 gals, time between oil changes is 250 hours, cost of lube oil is $3.0 per gal, and cost of other oils and grease is $0.5 per hour? Select one: O a. $0.10/hr o b. S0.31/hr O c. $0.50/hr o d. $0.81/hr

A specialty concrete mixer used in construction was purchased for $300,000 7 years ago. Its annual O&M costs are$105,000. At the end of the 8-year planning horizon, the mixer will have a salvage value of $5,000. If the mixer isreplaced, a new mixer will require an initial investment of $375,000. At the end of the 8-year planning horizon, itwill have a salvage value of $45,000. Its annual O&M cost will be only $40,000 due to newer technology. Analyzethis using an EUAC measure and a MARR of 15 percent to see if the concrete mixer should be replaced if the oldmixer is sold for its market value of $65,000.a. Use the cash flow approach (insider’s viewpoint approach). (11.2.1)b. Use the opportunity cost approach (outsider’s viewpoint approach). (11.3.1)

A portable concrete test instrument used in construction for evaluating and profiling concrete surfaces (MACRS-GDS 5-year property class) is under consideration by a construction firm for $ 25,000. The instrument will be used for 6 years and be worth $ 3,000 at that time. The annual cost of use and maintenance will be $ 9,000. Alternatively, a more automated instrument (same property class) available from the manufacturer costs $ 30,500, with use and maintenance costs of only $ 8,000 and salvage value after 6 years of $2,500. The marginal tax rate is 25%, and MARR is an after-tax 12%. Show the AW values used to make your decision:

Commercial Hydronics is considering replacing one of its larger control devices. A new unit sells for $27,000 (delivered). An additional $4,000 will be needed to install the device. The new device has an estimated 17-year service life. The estimated salvage value at the end of 17 years will be $2,000. The new control device will be depreciated as a 7-year MACRS asset. The existing control device (original cost = $20,000) has been in use for 11 years, and it has been fully depreciated (that is, its book value equals zero). Its scrap value is estimated to be $2,000. The existing device could be used indefinitely, assuming the firm is willing to pay for its very high maintenance costs. The firm's marginal tax rate is 40 percent. The new control device requires lower maintenance costs and frees up personnel who normally would have to monitor the system. Estimated annual cash savings from the new device will be $10,000. The firm's cost of capital is 12 percent.Evaluate the relative merits…

Legend Service Center just purchased an automobile hoist for $36,800. The hoist has an 8-year life and an estimated salvage value of $3,800. Installation costs and freight charges were $4,100 and $700, respectively. Legend uses straight-line depreciation.The new hoist will be used to replace mufflers and tires on automobiles. Legend estimates that the new hoist will enable his mechanics to replace 5 extra mufflers per week. Each muffler sells for $72 installed. The cost of a muffler is $38, and the labor cost to install a muffler is $14.(a)Compute the cash payback period for the new hoist. Cash payback period                       years (b)Compute the annual rate of return for the new hoist. (Round answer to 2 decimal places, e.g. 10.52%.) Annual rate of return                     %

Sheep Ranch Golf Academy is evaluating new golf practice equipment. The "Dimple- Max" equipment costs $137,000, has a 4-year life, and costs $10,600 per year to operate. The relevant discount rate is 9 percent. Assume that the straight-line depreciation method is used and that the equipment is fully depreciated to zero. Furthermore, assume the equipment has a salvage value of $10,100 at the end of the project's life, The relevant tax rate is 23 percent. All cash flows occur at the end of the year. What is the equivalent annual cost (EAC) of this equipment? (A negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Answer is complete but not entirely correct. $ 40,871.52 X EAC

Alfred Home Construction is considering the purchase of five dumpsters and the transport truck to store and transfer construction debris from building sites. The entire rig is estimated to have an initial cost of $125,000, a life of 8 years, a $5000 salvage value, an operating cost of $40 per day, and an annual maintenance cost of $2000. Alternatively, Alfred can obtain the same services from the city as needed at each construction site for an initial delivery cost of $125 per dumpster per site and a daily charge of $20 per day per dumpster. An estimated 45 construction sites will need debris storage throughout the average year. If the minimum attractive rate of return is 12% per year, how many days per year must the equipment be required to justify its purchase?

A granary has two options for a conveyor used in the manufacture of grain for transporting, filling, or emptying. One conveyor can be purchased and installed for $70,000 with $3,000 salvage value after 16 years. The other can be purchased and installed for $110,000 with $4,000 salvage value after 16 years. Operation and maintenance for each is expected to be $18,000 and $14,000 per year, respectively. The granary uses MACRS-GDS depreciation, has a income-tax rate of 25%, and a MARR of 9% after taxes. Solve, a. Determine which alternative is less costly, based upon comparison of after-tax annual worth. b. What must the cost of the second (more expensive) conveyor be for there to be no economic advantage between the two?

Hurzdan, Inc., is considering the purchase of a $410,000 computer with an economic life of five years. The computer will be fully depreciated over five years using the straight-line method. The market value of the computer will be $74,000 in five years. The computer will replace five office employees whose combined annual salaries are $119,000. The machine will also immediately lower the firm’s required net working capital by $94,000. This amount of net working capital will need to be replaced once the machine is sold. The corporate tax rate is 24 percent. The appropriate discount rate is 14 percent.   Calculate the NPV of this project.

The Darlington Equipment Company purchased a machine 5 years ago at a cost of $85,000. The machine had an expected life of 10 years at the time of purchase, and it is being depreciated by the straight-line method by $8,500 per year. If the machine is not replaced, it can be sold for $5,000 at the end of its useful life. A new machine can be purchased for $170,000, including installation costs. During its 5-year life, it will reduce cash operating expenses by $45,000 per year. Sales are not expected to change. At the end of its useful life, the machine is estimated to be worthless. The new machine is eligible for 100% bonus depreciation at the time of purchase. The old machine can be sold today for $50,000. The firm's tax rate is 25%. The appropriate WACC is 9%.   If the new machine is purchased, what is the amount of the initial cash flow at Year 0 after bonus depreciation is considered? Cash outflow should be indicated by a minus sign. Round your answer to the nearest dollar.$…