A small strip-mining coal company is trying to decide whether it should purchase or lease a new clamshell. If purchased, the "shell" will cost $150,000 and is expected to have a $47,500 salvage value after 6 years. Alternatively, the company can lease a clamshell for only $15,000 per year, but the lease payment will have to be made at the beginning of each year. If the clamshell is purchased, it will be leased to other strip-mining companies whenever possible, an activity that is expected to yield revenues of $8,000 per year. If the company's MARR is 12% per year, should the clamshell be purchased or leased on the basis of a future worth analysis? Assume the annual M&O cost is the same for both options. The future worth when purchased is $ The future worth when leased is $[ The clamshell should be (Click to select)

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There are two alternative machines for a manufacturing process. Both machines have the same output rate, but they differ in costs. Machine A costs $20,000 to set up and $8,000 per year to operate. It must be completely replaced every 3 years, and it has no salvage value. Machine B costs $50,000 to set up and $2,160 per year to operate. It should last for 5 years and has no salvage value. The costs of two machines are shown below.    0 1 2 3 4 5   Machine A 20,000 8,000 8,000 8,000       Machine B 50,000 2,160 2,160 2,160 2,160 2,160    Assuming the cost of capital is 10%,1. find the equivalent annual cost of Machine A in Box 1. Round it to a whole dollar, and no comma or the dollar sign.2. find the EAC of Machine B in Box 2. The same format as box 1.3. Based on the equivalent annual cost method, type in Box 3 which machine do you recommend, Machine A or Machine B.   Question 20 options: Blank # 1   Blank # 2   Blank #…

An equipment has a first cost of 500,000 PHP and the cost of installation is 30,000 PHP. At the end of its economic life of 35,000 operating hours, the salvage value is 10% of the equipment cost. Determine its book value at the end of the third year if its annual usage is 5,200hours.

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Raytheon wishes to use an automated environmental chamber in the manufacture of electronic components. The chamber is to be used for rigorous reliability testing and burn-in. It is installed for $800,000, $350,000 of which is borrowed at 11% for 5 years, and will have a salvage value of $150,000 after 8 years. Its use will create an opportunity to increase sales by $650,000 per year and will have operating expenses of $250,000 per year. Corporate income taxes are 40%. Develop tables using a spreadsheet to determine the ATCF for each year and the after-tax PW, AW, IRR, and ERR, if the chamber is kept for 8 years. After-tax MARR is 10%. Use 7 years class depreciation for MARCS

Your Area Director wants to purchase new ergonomic office equipment for your staff. The total purchase price is quoted by Herman Miller to be $22,656. The main reason for the proposed purchase is the high rate of lost work days due to low back and wrist/hand issues. These are common problems associated with poor ergonomic position and repetition. You can sell the equipment in 8 years and have a salvage value of $4,619. It is estimated that the purchase of the new equipment will cut your lost work days by 61% and save you an estimated $11,812 per year in the costs associated with the lost work days. What is your EUAW for this proposed purchase at an interest rate of 6%? A. $7,354 B. $4,886 C. $8,631 D. $6,625

A delivery car had a first cost of $34,000, an annual operating cost of $15,000, and an estimated $5000 salvage value after its 6-year life. Due to an economic slowdown, the car will be retained for only 4 years and must be sold now as a used vehicle. At an interest rate of 12% per year, what must the market value of the used vehicle be in order for its AW value to be the same as the AW if it had been kept for its full life cycle? The market value of the used vehicle is determined to be $ 26423

! Required information An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has an estimated first cost of $40,000, an annual operating cost (AOC) of $12,000, and a service life of 2 years. Method B will cost $70,000 to buy and will have an AOC of $6,000 over its 4-year service life. Method C costs $125,000 initially with an AOC of $3,500 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth 7% of its first cost. Perform a present worth analysis to select the method at /= 12% per year. The present worth of method A is $ The present worth of method B is $ The present worth of method C is $ ✓is selected. Method C

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