ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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An equipment was bought for P1 500 000 and has a salvage value of P600 000 at the end of its life. If the book value of the equipment is P870 000 at the end of two years, find the life span using Sum of Years Digit?
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- 21arrow_forwardA machine has a cost of Php 12218.00. It has a salvage of Php 2509.00 and an economic life of 9 years. Given this information and using SYD, what is the book value BV, ? Answer round off to two decimal places Round your answer to 2 decimal places.arrow_forwardEconomics Compare two CNC machines, A and B, on the basis of a present worth evaluation, and select the best alternative using i- 10% per year and a study period of 6 years. Alternative A First cost, $ -15,000 -28.000 Annual operating cost, S/year Major Maintenance in year 4, S -6,000 -9,000 -2000 Salvage value,S 3,000 5,000 Life, years Market value for machine A, at year 6 is 4,000, and 7,000 for machine O -15,000 - 6000(P/A,106,6) - 12,000(P/F,10%,4) + 4000(P/F,106,6)= S- 57,069.82; Select machine A O -15,000 - 6000(P/A,10%,6) - 12,000(P/F,10%,4) + 4000(P/F,10%,6) = 5-47,069.82; Select machine A O -28,000 - 9000(P/A,10%,6) - 2000(P/F,10%,4) - 7000(P/F,10%,6) = 5-81,445.86; Select machine B O 28,000 - 9000(P/A,10%,6) - 2000(P/F,10%,4) - 7000(P/F,10%,6)= S-64,612.05; Select machine Barrow_forward
- Question 3 For the below ME alternatives, which machine should be selected based on the PW analysis. MARR=10% First cost, $ Annual cost, $/year Salvage value, $ Life, years Machine A Answer the below questions: A- PW for machine A= 23,979 8,679 4,000 Machine B 30000 6,000 5,000 Machine C 10000 4,000 1,000arrow_forwardAn equipment has a first cost of P10, 000 a salvage value of P1000 at the end of 10years.Determine the book value after 5 years using declining balance method.arrow_forwardAny help would be appreciated, thanks!arrow_forward
- If Asset is purchased for 'X' value pesos. It has no salvage value but athere is a useful life of 'N'-year. Which one of the following statements about the SINKING FUND METHOD is TRUE?a.) The book value of the asset is X/2 after exactly N/2 years.b.) The book value of the asset is X/2 after less than N/2 years.c.) The book value of the asset is X/2 after more than N/2 years.arrow_forwardAn asset has a first cost of $11,000, an annual operating cost of $9000 and a salvage value of $5000 after 3 years. Calculate the annual worth for one cycle at i = 20% 12848- 57762- 43755- 7353- o ооооarrow_forwardA machine that cost $120,000 3 years ago can be sold now for $51,500. Its market value is expected to be $40,000 and $20,000 1 year and 2 years from now, respectively. Its operating cost was $18,000 for the first 3 years of its life, but the M&O cost is expected to be $23,000 for the next 2 years. A new improved machine that can be purchased for $135,500 will have an economic life of 5 years, and an operating cost of $9,000 per year, and a salvage value of $32,000 whenever it is replaced. At an interest rate of 10% per year, determine if the presently owned machine should be replaced now, 1 year from now, or 2 years from now. The annual worth of the existing machine one year from now is $- 50500 O. the annual worth of the existing machine two years from now is $- 30,500 . and the annual worth of the new machine is $-112,500 The presently owned machine should be replaced now 13arrow_forward
- Kk.7.arrow_forwardThe cost of the equipment is P550,000 and the cost of handling and installation is P28,000. If the book value of the equipment at the end of the 3 year P275,000 and the life of the equipment is assume to be 5 years. Determine the salvage value of this equipment at the end of 5 years.arrow_forward5.24 For the cash flows below, use an annual worth comparison to determine which alternative is best at an interest rate of 1% per month. First cost, $ M&O costs, $/month Overhaul every 10 years, $ Salvage value, $ Life, years X -90,000 -400,000 -30,000 -20,000 - Y 7000 3 - 25,000 10 Z -900,000 -13,000 -80,000 200,000 8arrow_forward
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