Sam is buying a refrigerator. He has two choices. A used one, at $475, should last him about three years. A new one, at $1225, would likely last eight years. Both have a scrap value of zero. Use an IRR analysis to determine which of the two alternatives is best. The MARR is 8 percent. Use the repeated lives method to deal with the unequal service lives of the two alternatives. Considering the alternatives in the order of lowest first cost, the best option is ▼which has an incremental rate of return of %. (Type an integer or decimal rounded to two decimal places as needed. Use an approximate ERR if the IRR cannot be used.)

The hospital is considering the purchase of imaging equipment worth $25,000 to improve its visual capture results, and improve outcomes.  The operating costs will be reduced by $7,000 per year.  The computer has an estimated life expectancy of 5 years, and an estimated salvage value of $5,000.  What is the profitability index if the discount rate is 8%.  Ignore reimbursement considerations.

You own a restaurant and are considering additional waiters.  Alfred’s pay scheme would be $120 per evening.  Blanchard’s pay scheme would be $10 per table served.   A. Which would be considered a variable coat and which a fixed cost? B. Charles, a third potential waiter, asks for $60 per evening plus $5/table.  From the perspectives of Alfred, Blanchard an Charles, who is taking the most risk and who the least? Who has the most to gain and who the least?   C. As you are about to choose, Dutch enters and offers the following: He will accept $7.50/table but wants a guaranteeof minimum $30 per evening.  Comparing Charles’ and Dutch’s offers, where do they “break even” for you (i.e., at how many tables will you be paying them the same amount)?

The company you work for is evaluating projects to upgrade their information management systems. Two projects under consideration are an upgrade of the account management system with an IRR of 8% and an upgrade of the resource management system with an IRR of 5%. If the discount rate is actually 6%, which project should the company undertake?

A company is trying to decide whether to buy a new delivery truck to replace their old one. The old truck originally cost $32,000. The new truck will cost $45,000. If they buy the new truck, they will sell the old truck to a used truck dealer for $4,000. Based on the information given, what is the immediate total incremental cost or benefit of buying the new truck? (Indicate a net benefit as a positive number and a net cost as a negative number.)

Your first job as an engineer is to purchase a new rotary vacuum-drum filter with a capacity of 1100 ft-. Your company purchased a similar filter eight years ago with a capacity of 700 ft- for $26,000. After checking the literature, you determine the cost index was 429 eight years ago and is 548 today. If the power-sizing exponent for this type of equipment is 0.52, estimate the cost of the new filter.

the foreseeable future. Based on the costs of each shown here: 囲, which should it choose? (Note: dollar amounts are in thousands.)

The Campbell Company is considering adding a robotic paint sprayer to its production line. The sprayer's base price is $800,000, and it would cost another $17,000 to install it. The machine falls into the MACRS 3-year class, and it would be sold after 3 years for $595,000. The MACRS rates for the first three years are 0.3333, 0.4445, and 0.1481. The machine would require an increase in net working capital (inventory) of $18,500. The sprayer would not change revenues, but it is expected to save the firm $391,000 per year in before-tax operating costs, mainly labor. Campbell's marginal tax rate is 25%. (Ignore the half-year convention for the straight-line method.) Cash outflows, if any, should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to the nearest dollar.   What is the Year-0 net cash flow? $   What are the net operating cash flows in Years 1, 2, and 3?   Year 1: $   Year 2: $   Year 3: $     What is the additional Year-3…