The engineering staff at the Sun Shipping Company has informed decision-makers that substantial money can be saved on the fleet's fuel bills if the ships' engines are adapted. Based on the cost of fuel, the engineers estimate that the firm will save $50,000 each year for the first 5 years and save $70,000 per year for the following five years. If these estimates are accurate, what would the company be willing to pay to adapt the engines? The company can earn 8% annually on its investments.

Jax Inc is considering the purchase of a new machine for the production of computers.  Machine A costs $7,000,000 and will last for six years.  Variable costs are 25% of sales, and fixed costs are $500,000 annually.  Machine B costs $10,000,000 and will last for ten years.  Variable costs for the machine are 15% of sales, and fixed costs are $750,000 annually.  The sales for each machine will be $4,000,000 per year.  The required rate of return is 9%, the tax rate is 21%, and both machines will be depreciated using straight-line depreciation with no salvage value. Calculate the equivalent annual annuity for Machine B. (Round to 2 decimals) What is the Net Present Value for Machine B? (round to 2 decimals)

For your new laboratory, you plan to purchase energy efficient freezers. There are two models in the market: Model X costs $100,000, and you need two units of model X for your project. Maintaining costs would be $50,000 and decreasing by $10,000 for each unit per year. Each freezer can be used for four years. At the end of which time, you estimate that the salvage value will be $70,000 for both freezers. Model Y costs $250,000 each. The maintaining cost of this model would be $10,000 per year and it would be decreasing by $5,000 starting in year 4. The salvage value of both model Y at the end of seven years is $60,000. Once again, two units of model Y is required for your project. Since you must complete your project in two years, you estimated that, the model X could be sold for $50,000 each and the model Y for $125,000 each after two years. Find the present worth difference between two models using MARR=10%. a) Between $52,640 and $54,800 O b) Between $35,640 and $37,800 c) Between…

Beryl's Iced Tea currently rents a bottling machine for $50,000 per year, including all maintenance expenses. It is considering purchasing a machine instead and is comparing two options: a. Purchase the machine it is currently renting for $155,000. This machine will require $23,000 per year in ongoing maintenance expenses. b. Purchase a new, more advanced machine for $260,000. This machine will require $17,000 per year in ongoing maintenance expenses and will lower bottling costs by $14,000 per year. Also, $36,000 will be spent up front to train the new operators of the machine. Suppose the appropriate discount rate is 9% per year and the machine is purchased today. Maintenance and bottling costs are paid at the end of each year, as is the cost of the rental machine. Assume also that the machines will be depreciated via the straight-line method over seven years and that they have a 10-year life with a negligible salvage value. The marginal corporate tax rate is 20%. Should Beryl's Iced…