From the data shown, determine the economic service lives of the defender and challenger. (Note: Values in the table are AW values, not individual year-end values.) Years Retained AW of Defender, $ AW of Challenger, $ 1 −145,000 −136,000 2 −96,429 −126,000 3 −63,317 −92,000 4 −39,321 −53,000 5 −49,570 −38,000

How many umbrellas would be required to sell to earn an operating profit of P1, 000, 000 if the XYZ Company sells this product with the following information: 11,250 units 20,000 units 15,000 units 45,000 units

Digital Tech Dynamics purchased a new quality inspection system for $550,000. The estimated salvage value was $50,000 after 10 years. Currently, the expected remaining life is 7 years with an AOC of $67,500 per year and an estimated salvage value of $40,000. The new president has recommended early replacement of the system with one that costs $430,000 and has a 12-year economic service life, a $35,000 salvage value, and an estimated AOC of $50,000 per year. If the MARR for the corporation is 12% per year, use factor-based relations to determine the minimum trade-in value necessary now to make the president's replacement economically advantageous. The minimum trade-in value necessary now to make the president's replacement economically advantageous is $[

A machine purchased 3 years ago for $140,000 is now too slow to satisfy the demand of the customers. It can be upgraded now for $88,000 or sold to a smaller company internationally for $50,000. The upgraded machine will have an annual operating cost of $88,000 per year and a $24,000 salvage value in 3 years. If upgraded, the presently owned machine will be retained for only 3 more years, then replaced with a machine to be used in the manufacture of several other product lines. The replacement machine, which will serve the company now and for a maximum of 8 years, costs $223,000. Its salvage value will be $56,000 for years 1 through 5: $20,000 after 6 years; and $10,000 thereafter. It will have an estimated operating cost of $45,000 per year. Perform an economic analysis at 11% per year using a specified 3-year planning horizon. a) Determine if the current machine should be replaced now or 3 years from now. b) Once decided, determine the equivalent AW for the next three years. a) The…