A mechanical engineer must recommend a new heating system to a commercial building owner. The owner intends to sell the building in 15 years. A gas fired furnace option has a design life of 5 years, an initial cost of $12,000, a replacement cost of $6,000 and annual operating costs of $3,500, but adds no value to the building when sold. A geothermal heat pump system has a design life of 10 years, an initial cost of $16,000, a replacement cost of $9,000, annual operating costs of $2,500, and increases the value of the building by $7,000, when it is sold at the end of year 15. Determine the equivalent uniform annual cost (EUAC) of costs for the option the engineer should recommend at an interest rate of 6.3%. Express your answer in $ to the nearest $10.
Q: A civil engineer involved in construction management must decide between two ways to pump concrete…
A: a. When Equipment is purchased Cost of Equipment= $6,000 Operating cost per metric ton=$0.50…
Q: An oil refinery finds that it is necessary to treat the waste liquids from a new process before…
A: Present Worth of in-house treatment=Present worth of the uniform annuity + present worth of the…
Q: Hughes Corporation is considering replacing a machine used in the manufacturing process with a new,…
A: Definition: Present value: This is the amount of future value reduced or discounted at a rate of…
Q: Determine the depreciation rate of the new rock crushing machine What is the Economic Life of the…
A:
Q: A retrofitted space-heating system is being considered for a small office building. The system can…
A: MARR = 15% Year Cash Flow 0 -110,000.00 1 30,070.00 2 30,070.00 3 30,070.00 4…
Q: Central Laundry and Cleaners is considering replacing an existing piece of machinery with a more…
A: The question is based on the concept of replacement decision, the old machine can be replaced to get…
Q: Aerotron Electronics is considering the purchase of a water filtration system to assist in circuit…
A: Given information is: Aerotron Electronics is considering the purchase of a water filtration system…
Q: Be-low Mining, Inc., is trying to decide whether it should purchase or lease new earthmoving…
A: Formula to make the decision of buy or lease is as follows: P = F(P/F, i, n) P = A(P/A, i, n)
Q: Because of tighter safety regulations, an improved air filtration system must be installed at a…
A: Present worth is the current value of cash flows that are expected to occur in the future.
Q: Gull Corp. is considering selling its old popcorn machine and replacing it with a newer one. The old…
A: Formula: Profit = Revenues - costs
Q: An oil refinery finds that it is necessary to treat the waste liquids from a new process before…
A: It is required to compare the present value of the cost of both the options. The refinery should…
Q: Assume that Wal-Mart Stores, Inc. has decided to surface and maintain for 10 years a vacant lot next…
A: Given:: Area= 12000 sq. yard Working Notes (WN): WN # 1 Bid A Installation cost…
Q: A manufacturer is considering the replacement of one of its boring machines with a newer and more…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: Two stamping machines are under consideration for purchase by a metal recycling company. The manual…
A: Alternatives can be compared using various kind of analysis like present worth analysis, future…
Q: Aerotron Electronics is considering the purchase of a water filtration system to assist in circuit…
A: While choosing which investment project will be undertaken, different investment appraisal…
Q: An oil refinery finds that it is necessary to treat the waste liquids from a new process before…
A: The annual worth of capital projects is the value generation every year. It determines with the help…
Q: Former Green Bay Packers defensive tackle, Don Davey, is considering opening a Firehouse Sub Shop in…
A: A discount rate at which the net present worth of an investment is equal to zero is term as an…
Q: Assume that Wal-Mart Stores, Inc. has decided to surface and maintain for 10 years a vacant lot next…
A: The present value of the bids is computed by determining the cash outflows every year and then…
Q: Commercial Hydronics is considering replacing one of its larger control devices. A new unit sells…
A: NPV means net value of benefits arises from the project during the life of the project. It is simply…
Q: A company is considering establishing a new machine to automate a meat packing process. The machine…
A: Net annual savings = Savings in labor costs - annual maintenance cost = $50,000 - 9000 = $41,000
Q: Aerotron Electronics is considering purchasing a water filtration system to assist in circuit board…
A:
Q: An oil company is being offered a special coating for the gasoline underground tank installation in…
A: The term "equivalent uniform annual cost" (EUAC) refers to a mathematical technique being used…
Q: A contractor has a 4-year concrete mixer whose first cost was $6,000, having 3 more years to live…
A: Annual Equivalent cost of the machine can be computed by dividing the present value of the machine…
Q: Assume that Wal-Mart Stores, Inc. has decided to surface and maintain for 10 years a vacant lot next…
A: Computation of Cost
Q: A company that sells has proposed to a small public utility company that it purchase a small…
A: Computation:
Q: A company is considering purchasing a new machine. The machine costs P50,000 and requires…
A: Internal rate of return (IRR) It is a capital budgeting tool to decide on whether the capital…
Q: Assume that Wal-Mart Stores, Inc. has decided to surface and maintain for 10 years a vacant lot next…
A: Calculation of present value outflows: Answer: Present value outflows for Bid A is $129,881.21…
Q: There is unused space in the factory. This space can either be rented to another business for…
A: Hello. Since your question has multiple sub-parts, we will solve first three sub-parts for you. If…
Q: A manufacturer is considering the replacement of one of its boring machines with a newer and more…
A: Capital Budgeting: Capital budgeting decisions are the most important decision in corporate…
Q: Which of the two options would be the best if you knew that the interest rate approved by the…
A: Information Provided: Price of mechanism = $50,000 Operating costs (when buying) = $2000 Salvage =…
Q: Two stamping machines are under consideration for purchase by a metal recycling company. The manual…
A: Present value is the present worth of any sum of money to be received in the future at a specified…
Q: The Ajax Corporation has an overhead crane that has an estimated remaining life of 8 years. The…
A: The company should replace the old crane because AW new < AW Def
Q: Commercial Hydronics is considering replacing one of its larger control devices. A new unit sells…
A:
Q: Kyuti, owner of Cutie Company, was approached by a local dealer in air conditioning units. The…
A: The amount of the total cash collected (inflow) through sales or saving less the total amount of…
Q: Assume that Wal-Mart Stores, Inc. has decided to surface and maintain for 10 years a vacant lot next…
A: Computation of Cost
Q: Compute on annual cost basis
A: Profit analysis of two investments are done so as to find out which will be a more cost effective…
Q: Bumps Unlimited, a highway contractor, must decide whether to overhaul a tractor and scraper or…
A: While choosing which investment project will be undertaken, different appraisal techniques are used.…
Q: MAG Industrial needs 1000 square meters of storage space. Purchasing land for $80,000 and then…
A:
Q: CTI Corporation purchased a special-purpose turnkey stamping machine four years ago for $18,000. It…
A: Old machine: New machine:
Q: Calculate the NPV of this project.
A: It is a method under capital budgeting which includes the computation of the net present value of…
Q: An automobile-manufacturing company isconsidering purchasing an industrial robot to do spotwelding,…
A:
Q: A chemical mixer was purchased 8 years ago for $100,000. If retained, it will require an investment…
A: Given: MARR = 10%. EUAC is nothing but equivalent uniform annual cost. This cost is nothing but the…
Q: Two stamping machines are under consideration for purchase by a metal recycling company. The manual…
A: Given Information: Manual Model Computer controlled model Machine Cost…
Q: ducer is studying the possibility of installing an irrigation system on his property. He estimates…
A: The present value would be the equivalent value based on interest rate and time period of project…
Q: Commercial Hydronics is considering replacing one of its larger control devices. A new unit sells…
A: Net Present value is the difference between the present value of cash inflows and present value of…
Q: North City must choose between two new snow-removal machines. The SuperBlower has a $70,000 first…
A: Operating costs are those costs which are used to operate a machine. These costs are an important…
Q: n eight-year life and a P250,000 salvage value. Its annual operating costs will be P800,000. A…
A: Given Manual Computer Investment cost 1250000 4750000 Cost 8,00,000 5,00,000 Upgradation…
Q: A mechanical engineer must recommend a new heating system to a commercial building owner. The owner…
A: Given, Gas Fired Furnace Initial Cost = $10,000 Replacement Cost = $5,000 per 5 years Annual…
Trending now
This is a popular solution!
Step by step
Solved in 6 steps with 4 images
- A mechanical engineer must recommend a new heating system to a commercial building owner. The owner intends to sell the building in 15 years. A gas fired furnace option has a design life of 5 years, an initial cost of $13,000, a replacement cost of $7,000 and annual operating costs of $3,500, but adds no value to the building when sold. A geothermal heat pump system has a design life of 10 years, an initial cost of $18,000, a replacement cost of $9,000, annual operating costs of $2,500, and increases the value of the building by $6,000, when it is sold at the end of year 15. Determine the PW of costs for the option the engineer should recommend at an interest rate of 7.5%. Express your answer in $ to the nearest $100.An automobile-manufacturing company isconsidering purchasing an industrial robot to do spotwelding, which is currently done by skilled labor.The initial cost of the robot is $210,000, and theannual labor savings are projected to be $150,000.If purchased, the robot will be depreciated underMACRS as a five-year recovery property. The robotwill be used for seven years, at the end of which time,the firm expects to sell it for $60,000. The company’s marginal tax rate is 35% over the project period.Determine the net after-tax cash flows for each periodover the project life. Assume MARR = 15%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 $20,500. The instrument will be used for 6 years and be worth $1,000 at that time. The annual cost of use and maintenance will be $8,000. Alternatively, a more automated instrument (same property class) available from the manufacturer costs $29,500, with use and maintenance costs of only $7,500 and salvage value after 6 years of $3,500. The marginal tax rate is 25%, and MARR is an after-tax 12%. Determine which alternative is less costly, based upon comparison of after-tax annual worth. Show the AW values used to make your decision: Alternative 1: $ Alternative 2: $
- 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 $22,000. The instrument will be used for 6 years and be worth $2,000 at that time. The annual cost of use and maintenance will be $9,500. Alternatively, a more automated instrument (same property class) available from the manufacturer costs $29,000, with use and maintenance costs of only $7,500 and salvage value after 6 years of $3,000. The income-tax rate is 25% and MARR is an after-tax 12%. Determine which alternative is less costly, based upon comparison of after-tax annual worth.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: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 $1,500 at that time. The annual cost of use and maintenance will be $12,000. Alternatively, a more automated instrument (same property class) available from the manufacturer costs $26,000, with use and maintenance costs of only $8,500 and salvage value after 6 years of $1,500. The marginal tax rate is 25%, and MARR is an after-tax 12%. Determine which alternative is less costly, based upon comparison of after-tax annual worth. Show the AW values used to make your decision: Alternative 1: $ Alternative 2: $ Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±10.
- 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 $21,500. 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 $5,500. Alternatively, a more automated instrument (same property class) available from the manufacturer costs $26,000, with use and maintenance costs of only $7,500 and salvage value after 6 years of $2,000. The marginal tax rate is 25%, and MARR is an after-tax 12%. Determine which alternative is less costly, based upon comparison of after-tax annual worth. Alternative 1 Show the AW values used to make your decision: Alternative 1: $ -8835.96 Alternative 2: $ -11702.16 Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is +10.The Parkview Hospital is considering the purchase of a new autoclave. This equipment will cost $159,000. This asset will be depreciated using an MACRS (GDS) recovery period of three years. What is the BV at the end of the second year? Click the icon to view the GDS Recovery Rates (r) for the 3-year property class. Choose the correct answer below. More Info O A. The BV at the end of the second year is $50,880. O B. The BV at the end of the second year is $70,676. GDS Recovery Rates (r) O C. The BV at the end of the second year is $35,330. 3-year Property Class 0.3333 Year O D. The BV at the end of the second year is $106,005. 1 2 0.4445 3 0.1481 0.0741Assume that Walmart Inc. has decided to surface and maintain for 10 years a vacant lot next to one of its stores to serve as a parking lot for customers. Management is considering the following bids involving two different qualities of surfacing for a parking area of 12,700 square yards. Bid A: A surface that costs $5.50 per square yard to install. This surface will have to be replaced at the end of 5 years. The annual maintenance cost on this surface is estimated at 25 cents per square yard for each year except the last year of its service. The replacement surface will be similar to the initial surface. Bid B: A surface that costs $10.75 per square yard to install. This surface has a probable useful life of 10 years and will require annual maintenance in each year except the last year, at an estimated cost of 10 cents per square yard. Click here to view factor tables. Compute present value of the bids. You may assume that the cost of capital is 10%, that the annual maintenance…
- An automobile-manufacturing company is considering purchasing an industrial robot to do spot welding, which is currently done by skilled labor. The initial cost of the robot is $180,000, and the annual labor savings are projected to be $103,753. If purchased, the robot will be depreciated under MACRS as a five-year recovery property. The robot will be used for seven years, at the end of which time, the firm expects to sell it for $58,000. The company's marginal tax rate is 25% over the project period. Assume MARR = 18%. Click the icon to view the MACRS depreciation schedules. ..... Determine the net after-tax cash flows for each period over the project life. Fill in the table below. (Round to the nearest dollar.) Period Net After-Tax Cash Flow 1 $Assume that Wal-Mart Stores, Inc. has decided to surface and maintain for 10 years a vacant lot next to one of its stores to serve as a parking lot for customers. Management is considering the following bids involving two different qualities of surfacing for a parking area of 12,100 square yards.Bid A: A surface that costs $6.00 per square yard to install. This surface will have to be replaced at the end of 5 years. The annual maintenance cost on this surface is estimated at 25 cents per square yard for each year except the last year of its service. The replacement surface will be similar to the initial surface.Bid B: A surface that costs $10.00 per square yard to install. This surface has a probable useful life of 10 years and will require annual maintenance in each year except the last year, at an estimated cost of 9 cents per square yard. Compute present value of the bids. You may assume that the cost of capital is 9%, that the annual maintenance expenditures are incurred at the…Wood and steel structures are being considered for a foot bridge. The wooden structure requires a $10,000 first cost, annual painting and general maintenance is estimated to cost 1,800, a major overhaul will e required every 5 years and cost $3,500. The steel bridge will ost $25,000with annual upkeep estimated to cost $1,00,and only one overhaul il be regured in the 15th year and cost S6,00 The ste bridgewil ave a sahage value of $5,000 a th end of t i in 5 years. The wooden bridge will ave no salvage value at the end of 25 years,but an expense of S4,000wil be reguired to remove the structure. Using present worth comparison determine the best atemative. Interest is 10% Match each item to a choice: BETTTER ALTERNATIVE Choices: E Steel foot bridge for P35052 E Stel foot bridge for P33280 # Wooden foot bridge for P36742 E Wooden foot bridge for P28130 E Wooden foot bridge for P31588 E Steel foot bridge for P26874