An equipment that can be bought for $100, 000 is to be used in a manufacturing process. It is estimated to have a service life of 5 years and a 10% salvage value at the end of its service life. Estimates of revenue possible for using this equipment are the following Estimate 1 Estimate 2 Estimates 3 Revenue is initially at 20,000 increasing at 2,000 per year If the before-tax MARR is 10% per year, use PW to determine at which of these different Revenue is initially at 21,000 increasing at a rate of 5% per year Revenue is constant at 23,000 estimates will make the decision to purchase the equipment.

An equipment that can be bought for $100, 000 is to be used in a manufacturing process. It is estimated to have a service life of 5 years and a 10% salvage value at the end of its service life. Estimates of revenue possible for using this equipment are the following Estimate 1 Estimate 2 Estimates 3 Revenue is initially at 20,000 increasing at 2,000 per year If the before-tax MARR is 10% per year, use PW to determine at which of these different Revenue is initially at 21,000 increasing at a rate of 5% per year Revenue is constant at 23,000 estimates will make the decision to purchase the equipment.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Please help me
Required information For equipment that has a first cost of $10,500, the estimated operating costs and year-end salvage values are as shown. Year Operating Cost, $ Salvage Value, $ 1 -1,000 7,000 2 -1,200 5,000 3 -1,300 4,500 4 -2,000 3,000 5 -3,000 2,000 Determine the economic service life ESL, at i= 10% per year using factors. The economic service life ESL, is 4 O years with the AW $- 5982.12 =
A construction company is evaluating the purchase of a new concrete mixer with hydraulic hopper and automatic controller. The mixer will have a first cost of BD 12,000, a life of 9 years, and no salvage value. It will require 2 operators at a cost of BD 4.500 per hour each. A total of one cubic meter of concrete can be poured each hour by the mixer. Alternatively, if human labor is used, 5 workers, each earning BD 4 per hour, are required to one cubic meter per hour. The estimated cost of the material is BD 21 per cubic meter and the MARR is 7% per year (clearly show the S.N., numeric answer, and final decision). a) Determine the minimum cubic meters per year to justify the purchase of the automatic mixer. b) The company expects to produce 140 cubic meters per year, which option should they select? Why?
Plsss answer all
A steam generation system at a biomass-fueled power plant uses an electrostaticprecipitator (ESP) to clean its gaseous effluents. The power plant has consistently made use ofthe same type of ESP over the past several years. The installed cost of a new ESP has beenrelatively constant at $100,000. Records of operation and maintenance expenses indicate thefollowing average expenses per year as a function of the age of the ESP. The MVs of the ESP arealso reasonably well known as a function of age. Data graph in image attached. Determine the best time to replace the ESP if the MARR is 15% per year.
Part a.) An engineer with Calahan Technologies calculated the AW of cost values shown for a presently owned machine using estimates she obtained from the vendor and company records. A challenger has an economic service life of 7 years with an AW of $-86,000 per year. Assume that all future costs remain as estimated and the challenger's technology will definitely replace that of the defender within 5 years. When should the company purchase the challenger? Retention Period, Years AW of Costs, $ per Year -92,000 2 -81,000 -87,000 4 -89,000 5 -95,000 Part b.) The costs and revenue projections for a new product made on the machine from Part a.) are estimated below. What is the estimated profit at a production rate of 25% above breakeven? Fixed cost = $592,000 per year Production cost per unit = $198 Revenue per unit = $330
A factory purchased new heavy-duty equipment and intended to be used for 4 years. The information is given below. At MARR of 22% per year, determine the capital recovery (CR). Instruction: Enter a negative value for CR. First Cost, $ -275,000 Annual cost, $/year 5,000 Salvage value, $ 125,000 Life, years 4
Breakeven Example 8.2 • MARR is 12% per year. Select the more economical vendor bid. -8,000 - 13.000 Initial cost. S -3,500 -1.600 Annual costs, S per year Salvage value. $ Life. vears 2,000 10
Ab3
A company owns an equipment that costs ₱ 90,000. After 8 years it will have an estimated salvage value of ₱ 18,000. Determine its book value at the end of 5 years using Declining Balance Method. Do not use excel!
This is engineering economics subject.
Answer All Parts