QUESTION 1 What is the annual worth of the following project First cost - 45,000 Annual cost -31,000 Life 8 years salvage value 10,000 Interest 10% -32657 -35999 -38569 -45666
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- 5. A small branch office of a contracting company is planning to purchase a new laser printer. Three vendors have supplied cost, useful life, and estimated salvage value data, shown in the following table. The MARR is 12%. Investment (first) cost Annual service cost Salvage value Useful life A $800 $180/yr $200 5 years Laser printer B $1,400 $150/yr $825 5 years C $900 $170/yr $100 5 years Draw cash flows for these alternatives. If the expected annual saving in labor is $500 regardless of which machine is purchased, what are the annual equivalent values of these alternatives.2. A certain company is considering two types of machine for its operation. The data are as follows: Machine A First cost P150,000 Life 4 yrs Salvage value P15,000 Annual operating cost P48,000 Annual taxes P4,200 Annual repairs P7,200 Machine B First cost P200,000 Life 8 yrs P10,000 Salvage value Annual operating cost P32,000 Annual taxes P7,200 Annual repairs P4,200 If money is worth 12% compounded annually, compute the difference of the present worth of the two machines.5- Year SV O&M 15,000 1000 12,000 1500 9,000 The table above lists salve value (SV) and operating and maintenance (O&M) cost of an asset through 3 years with the initial cost of $20,000. Given MARR is 10%, which of the statements 3 2000 is correct (choose the closest answer)? a) The marginal cost at year 2 is $6,000 and the annual cost (EUAC) through year two is $6,500 b) The marginal cost at year 2 is $6,000 and the annual cost (EUAC) through year two is $7,048 c) The marginal cost at year 2 is $6,500 and the annual cost (EUAC) through year two is $7,048 d) The marginal cost at year 2 is $6,500 and the annual cost (EUAC) through year two is $6,000
- 20 00:03:12 You and a group of friends have purchased an annual lease at a commercial fishing pond for the last several years. It is possible to renew the lease for up to 5 years. Based on past costs, you calculated the AW values for different lease periods. Current Lease Renewal, years AW Value, $ per year ||1 2 13 ||4 5 -9200 -8100 -8700 -8900 -9500 Another lease option, a few miles further from your home, is available with an economic service life of 7 years and an AW of $-10000. Assuming all future costs remain unchanged, when should you renew the current lease? You value your recreation highly by using a MARR of 25% per year. The current lease should be renewed in 2 years.4) Which of the following power plants is better investment, assuming 8% interest on the sinking fund and no salvage value in either case, taxes/insurance at 10% and interest on capital at 12%. Use ROR and Present Worth Method. - Coal plant which costs P1M, last 10 years and cost annually P100k to operate. - Fuel-oil plant which costs P800k will last 7 years and cost annually P70k to operate.1.A company have to choose the type of electrical generator to sustain its production operation in case of power failures. Type A Type B First Cost P200,000 P300,000 Annual Operations Cost P 32,000 P 24,000 Annual Labor Cost P 50,000 P 32,000 Insurance & Taxes 3% of First Cost 3% of First Cost Payroll taxes 4% of first Cost 4% of first Cost Estimated Life 10 yrs 10 yrs Note: All the Types of Genset will depreciate. If the minimum required rate of return is 15%, which type of genset should be selected? Using Present Worth Method, which type should be selected?
- Question 5 Cost data of a machine is shown in the following table with an annual rate of 12%. Calculate annual worth at end of year 2 M&O cost Retention Yr. Market Value per year O First Cost) 55,000 1 35,000 45.000 2 20,000 47.500 3 15,000 50.000 4 2.000 53.500 O 6a256 O 69209 O R476 O 67.854 Question 6 Use same cost data from last question and 12% annual rate of return. Calculate annual worth at end of Year 3. O 66.765 O 64332 O 67.428 O 66256 D Question 7 Use the same cost data of the machine from the above 2 questions and 12% interest rate per year. What is the ESL of this machine? 01 04Fitzgerald, Ivy, Garcia, Nichols, Eudy, Williams, Thomas, Owens, and Nagy (FIGNEWTON) Inc. must replace its fig - crushing equipment. The alternatives under consideration are presented below. Alternative First Cost Net Annual Benefits Useful Life A $170, 500 $14, 675 5 years B 205,000 17,000 7 years C 242,500 16, 350 8 years D 290,000 14,825 10 years a) Which anlaysis method should be used to select the alternative? b) Why should that analysis method be used? c) if FIGNEWTON uses a MARR of 8%, what alternative should be chosen? d) if FIGNEWTON uses a MARR of 18%, what alternative should be chosen? Submit one excel file with answers a), b), c) and d) highlighted clearly.Helio Co. owns a large gantry crane for moving around heavy items in their warehouse. The following analysis was done the forklift. What was the interest rate used in this analysis? Year Marginal Cost PWo Sum PWo Total AW 1 $6,500 $6,075 $6,075 $6,500 $7,150 $6,245 $12,320 $6,814 $7,865 $6,420 $18,740 $7,141 4 $8,652 $6,600 $25,340 $7,481 $9,517 $6,785 $32,125 $7,835 7.0% 10.0% 9.0% 5.0% 7.5% 2. 3.
- 29. Solve Problem using annual worth method. CLC Publishing is considering the purchase of an offset printing machine. A study of three available alternatives shows the following estimates: A B C Acquisition Cost P700 000.00 P850 000.00 P1 000 000.00 Shipping Cost 5% 5% 8% Net Annual Benefit P155 000.00 P145 000.00 P170 000.00 Useful Life 8 years 16 years 16 years Salvage Value P35 000.00 P70 000.00 P80 000.00 (Ans. ATA= — P799.02; ATB = P3916.33; ATC = — P815.40)Might-E Zenn Dynasty $12,000 $4,073 $13,500 $5,682 $8,182 $1,700 $14,500 $6,244 $7,544 $2,500 Initial costs Annual expenses Annual savings $6,573 $1,300 Salvage value Life (years) 10 10 10 IRR 16.82% 14.00% 1.09%PW -30 0-10 1500- 1000- 500 0 -500 ID) -1000- -1500 Percent Change Annual Revenue Initial Investment Salvage Value +1,000 +20 20 3500 3000 2500 2000- -10 10 What percentage change in initial investment would cause the project to become unattractive? BO O Cannot be determined from the information given 30