An injection molding system has a first cost of $180,000 and an annual operating cost of $84,000 in years 1 and 2,increasing by $5,000 per year thereafter. The salvage value of the system is 25% of the first cost regardless of when thesystem is retired within its maximum useful life of 5 years. Using a MARR of 15% per year, determine the ESL and therespective AW value of the system. via spreadsheet that graphs the total AW and its components

The objective of this question is to determine the Economic Service Life (ESL) and the Annual Worth…

Answered: An injection molding system has a first…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Based on company records of similar equipment, a consulting aerospace engineer at Aerospatiale estimated AW values for a presently owned, highly accurate steel rivet inserter as shown. A challenger has ESL = 2 years and AWC= $−41,300 per year. The MARR is 12% per year. If Retained ThisNumber of Years The AW Value Is,$ per Year 1 −62,000 2 −51,000 3 −49,000 4 −53,000 5 −70,000 When should the next replacement evaluation take place, and under what assumption? The next replacement evaluation should take place in (Click to select) 4 2 3 5 years, and under the assumption that the (Click to select) defender challenger estimates do not change.
AE Criterion - Single Project* *Blank & Tarquin (2005). Engineering Economy, 7th edition. Example 6.3. The owner of a pizza shop plans to purchase and install five portable in-car systems to increase delivery speed and accuracy. Each system costs $4600, has a 5-year useful life, and may be salvaged for an estimated $300. Total operating cost for all systems is $1000 for the first year, increasing by $100 per year thereafter. The owner estimates increased net income of $6000 per year for all five systems. Is this project financially viable at an MARR of 10%?
White Oaks Properties builds strip shopping centers and small malls. The company plans to replace its refrigeration, cooking, and HVAC equipment with newer models in one entire center built 9 years ago. 9 years ago, the original purchase price of the equipment was $625,000 and the operating cost has averaged $275,000 per year. Determine the equivalent annual cost of the equipment if the company can now sell it for $224,000. The company's MARR is 22% per year. The equivalent annual cost of the equipment is determined to be $1 Leonard, a company that manufactures explosion-proof motors, is considering two alternatives for expanding its international export capacity. Option 1 requires equipment purchases of $945,000 now and $440,000 two years from now, with annual M&O costs of $72,000 in years 1 through 10. Option 2 involves subcontracting some of the production at costs of $235,000 per year beginning now through the end of year 10. Neither option will have a significant salvage value.…
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The Bureau of Public Highways is considering two possible types of road surfacing with cost estimates per kilometer as follows: Type A Type B First Cost P500k P650k Resurfacing period 8 years 12 years Resurfacing Cost P200k P250k Average annual maintenance cost P15k P20k The periodic resurfacing do not include the base of the subgrade. Compare these types by calculating the present worth for 24 year service, with no salvage value at the end of this time using interest rate of 10%. What is the Present Worth of Alternative B?

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