The AW values for retaining a presently owned machine for additional years are shown in the table. Note that the values represent the AW amount for each of the n years that the asset is kept, i.e., if it is kept 5 more years, the annual worth is $−95,000 for each of the 5 years. Assume that future costs remain as estimated for the replacement study and that used machines like the one presently owned will always be available. (a) What is the ESL and associated AW of the defender at a MARR of 12% per year? (b) A challenger with an ESL of 7 years and an AWC = $-90,000 per year has been identified. Which AW will be less for the respective ESL periods?   Retention Period, Years AW Value, $ per Year 1 -89,000 2 -95,000 3 -86,000 4 -85,000 5 -95,000 a) The ESL of the defender is ____year(s) with the lowest AW of $_____. b) The         (Click to select defender challenger)  has the lower AW at $______for n equal to ____

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There are two alternative machines for a manufacturing process. Both machines have the same output rate, but they differ in costs. Machine A costs $20,000 to set up and $8,000 per year to operate. It must be completely replaced every 3 years, and it has no salvage value. Machine B costs $50,000 to set up and $2,160 per year to operate. It should last for 5 years and has no salvage value. The costs of two machines are shown below.    0 1 2 3 4 5   Machine A 20,000 8,000 8,000 8,000       Machine B 50,000 2,160 2,160 2,160 2,160 2,160    Assuming the cost of capital is 10%,1. find the equivalent annual cost of Machine A in Box 1. Round it to a whole dollar, and no comma or the dollar sign.2. find the EAC of Machine B in Box 2. The same format as box 1.3. Based on the equivalent annual cost method, type in Box 3 which machine do you recommend, Machine A or Machine B.   Question 20 options: Blank # 1   Blank # 2   Blank #…

An equipment has a first cost of 500,000 PHP and the cost of installation is 30,000 PHP. At the end of its economic life of 35,000 operating hours, the salvage value is 10% of the equipment cost. Determine its book value at the end of the third year if its annual usage is 5,200hours.