Two processes can be used for producing a polymer that reduces friction loss in engines. Process T will have a first cost of$640,000, an operating cost of $66,000 per year, and a salvage value of $80,000 after its 2-year life. Process W will have afirst cost of $1,140,000, an operating cost of $25,000 per year, and a $120,000 salvage value after its 4-year life. Process Wwill also require updating at the end of year 2 at a cost of $90,000. Which process should be selected on the basis of apresent worth analysis at a MARR of 12% per year?The present worth of process T is $-and the present worth of process W is $-[223662The process selected on the basis of the present worth analysis is process

Data given: Process T: First cost=$640,000 Operating cost =$66,000 Salvage value= $ 80,000 n=2 year…

Answered: Two processes can be used for producing…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Poly-Chem Plastics is considering two types of injection molding machines: hydraulic and electric. The hydraulic press (HP) will have a first cost of $605,000, annual costs of $200,000, and a salvage value of $70,000 after 5 years. Electric machine technology (EMT) will have a first cost of $800,000, annual costs of $122,000, and a salvage value of $130,000 after 5 years The ROR on the extra investment for the EMT alternative is
Two techniques can be used to produce expansion anchors. Technique A costs $90,000 initially and will have a $12,000 salvage value after 3 years. The operating cost with this method will be $33,000 in year 1, increasing by $2600 each year. Technique B will have a first cost of $113,000, an operating cost of $7000 in year 1, increasing by $7000 each year,and a $43,000 salvage value after its 3-year life. At an interest rate of 13% per year, which technique should be used on the basis of a present worth analysis? Notice that there are no revenues. Please work out and do not use excel, however if you use excel please show how to input everything needed down to the formula, thank you!
You are evaluating two different silicon wafer milling machines. The Techron I costs $249,000, has a 3-year life, and has pretax operating costs of $66,000 per year. The Techron II costs $435,000, has a 5-year life, and has pretax operating costs of $39,000 per year. For both milling machines, use straight-line depreciation to zero over the project's life and assume a salvage value of $43,000. If your tax rate is 22 percent and your discount rate is 11 percent, compute the EAC for both machines. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Techron I Techron II Which machine do you prefer? O Techron II O Techron I
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You are evaluating two different silicon wafer milling machines. The Techron I costs $255,000, has a three-year life, and has pretax operating costs of $68,000 per year. The Techron II costs $445,000, has a five-year life, and has pretax operating costs of $41,000 per year. For both milling machines, use straight-line depreciation to zero over the project’s life and assume a salvage value of $45,000. If your tax rate is 25 percent and your discount rate is 8 percent, compute the EAC for both machines. (Your answer should be a negative value and indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

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