An airport needs a modern material handling system for facilitating accessto and from a busy maintenance hangar. A second-hand system will cost$75,000. A new system with improved technology can decrease labor hoursby 20% compared to the used system. The new system will cost $150,000 to purchase and install. Both systems have a useful life of five years. The market value of the used system is expected to be $20,000 in five years, and the market value of the new system is anticipated to be $50,000 in five years. Current maintenance activity will require the used system to be operated eight hours per day for 20 days per month. If labor costs $40 per hour and the MARR is 1% per month, which system should be recommended?

Suppose we are thinking about replacing an old computer with a new one. The old one cost us $1,680,000; the new one will cost, $2,027,000. The new machine will be depreciated straight-line to zero over its five-year life. It will probably be worth about $450,000 after five years. The old computer is being depreciated at a rate of $360,000 per year. It will be completely written off in three years. If we don't replace it now, we will have to replace it in two years. We can sell it now for $558,000; in two years, it will probably be worth $162,000. The new machine will save us $378,000 per year in operating costs. The tax rate is 21 percent, and the discount rate is 12 percent. a-1. Calculate the EAC for the the old computer and the new computer. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a-2. What is the NPV of the decision to replace the computer now? (A negative answer should…

A distribution center wants to evaluate an alternative product tracking system. The system has an initial cost of $500,000 and a useful life of 7 years. The operating cost is estimated to be $550 per metric ton of product moved per day. The center can handle between 30 and 50 tons per day. Analyze the sensitivity of the PW to changes in a 10-metric-ton increment of product moved. Use an interest rate of 3% per year and 200 days of work per year. Find the PW of 3 options.

Suppose we are thinking about replacing an old computer with a new one. The old one cost us $1,960,000; the new one will cost, $2,531,000. The new machine will be depreciated straight-line to zero over its five-year life. It will probably be worth about $660,000 after five years. The old computer is being depreciated at a rate of $472,000 per year. It will be completely written off in three years. If we don't replace it now, we will have to replace it in two years. We can sell it now for $684,000; in two years, it will probably be worth $204,000. The new machine will save us $413,000 per year in operating costs. The tax rate is 25 percent, and the discount rate is 8 percent. a-1. Calculate the EAC for the the old computer and the new computer. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a - What is the NPV of the decision to replace the computer now? (A negative answer should be…

A conveyor system costs $110,000 to install. The salvage value of the conveyor system decreases by $20,000 each year until its salvage value is $0, at which point it no longer decreases. The cost to operate and maintain the conveyor system the first year is $20,000; this cost increases by 7% per year. What is the optimal replacement interval and minimum EUAC for the conveyor system, assuming a MARR of 15% is used? Click here to access the TVM Factor Table Calculator. years ORI: EUAC*: $ Carry all interim calculations to 5 decimal places and then round your final answers to a whole number. The tolerance is ±10 for the EUAC*. eTextbook and Media Hint Assistance Used Construct an Excel® table that computes the EUAC for different values of n. This will help you to find EUAC*, from which you can deduce the optimal replacement interval.

Alfa bakery is considering replacing its existing automated oven. The current market value of the oven is $14,600. The value of the oven depreciates by 27% per year. The bakery requires $17,100 in maintenance costs per year as of today. The maintenance costs are expected to increase by $5,300 per year as the oven gets older. If the MARR is 11.8% and the production is 34 cakes per day; should Alfa bakery instead replace it by outsource their automated baking production to an external bakery for $2.20 per cake?

Suppose we are thinking about replacing an old computer with a new one. The old one cost us $1,840,000; the new one will cost, $2,225,000. The new machine will be depreciated straight-line to zero over its five-year life. It will probably be worth about $570,000 after five years.   The old computer is being depreciated at a rate of $424,000 per year. It will be completely written off in three years. If we don’t replace it now, we will have to replace it in two years. We can sell it now for $630,000; in two years, it will probably be worth $186,000. The new machine will save us $398,000 per year in operating costs. The tax rate is 24 percent, and the discount rate is 11 percent.   a-1. Calculate the EAC for the the old computer and the new computer. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) a-2. What is the NPV of the decision to replace the computer now?…

Lopez Company is considering replacing one of its old manufacturing machines. The old machine has a book value of $47,000 and a remaining useful life of five years. It can be sold now for $57,000. Variable manufacturing costs are $47,000 per year for this old machine. Information on two alternative replacement machines follows. The expected useful life of each replacement machine is five years.    Machine A Machine B Purchase price $ 118,000 $ 132,000 Variable manufacturing costs per year 20,000 14,000 (a) Compute the income increase or decrease from replacing the old machine with Machine A.(b) Compute the income increase or decrease from replacing the old machine with Machine B.(c) Should Lopez keep or replace its old machine?(d) If the machine should be replaced, which new machine should Lopez purchase?