A piece of equipment that was purchased 2 years ago by Toshiba Imaging for $50,000 was expected to have a useful life of 5 years with a $5000 salvage value. Its performance was less than expected, and it was upgraded for $20,000 one year ago. Increased demand now requires that the equipment be upgraded again for another $16,000 so that it can be used for 3 more years. If upgraded, its M&O costs will be $22,000 and it will have a $11,500 salvage after 3 years. Alternatively, it can be replaced with new equipment priced at $65,000 with M&O costs of $14,000 per year and a salvage value of $23,000 after 6 years. If replaced now, the existing equipment will be sold for $7000. Determine the values of P, S, M&O, and n for the defender in a replacement study. The value of Pis $-24,500 The value of S is $ 11500 The value of M&O is $- 22000 per year. The value of nis 3 years.

A project costs 50,000 and yields annual cash inflow of 10000 for 7 years. Calculate its payback period.

3. A distillation column is designed, purchased and installed for a cost of $2.6 million. The equipment has a depreciable life of ten (10) years with a final salvage value of $100,000 in year 10. For this equipment determine ... a. The book value and depreciation allowance for each year using straight-line (SLN) depreciation. b. Book values and depreciation allowances for each year using double-declining (DDB) depreciation.

Calculate the simple payback for an electricity project that had an initial cost of $0.5 million 0.4 million kWh/yr. Assume an electricity price of $0.15/kWh.