Two pumps are being considered to replace an old one. The details of the two pumps are shown below. If the MARR is 15%, which pump do you recommend buying if the repeatability assumption applies? Pump A 3,000 Pump B 2,200 Investment (RO) Annual Maintenance 210 315 (RO/year) Power consumption (RO/year) Salvage Value (RO) Life time (year) 1,100 1,200 350 150

Two pumps are being considered to replace an old one. The details of the two pumps are shown below. If the MARR is 15%, which pump do you recommend buying if the repeatability assumption applies? Pump A 3,000 Pump B 2,200 Investment (RO) Annual Maintenance 210 315 (RO/year) Power consumption (RO/year) Salvage Value (RO) Life time (year) 1,100 1,200 350 150

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Please view the following video before answering this question. Video Solution: 11.01-PR007 A pipeline contractor can purchase a needed truck for $44,000. Its estimated life is 6 years, and it has no salvage value. Maintenance is estimated to be $2,100 per year. Operating expense is $60 per day. The contractor can hire a similar unit for $130 per day. MARR is 7%. Click here to access the TVM Factor Table Calculator Part a How many days per year must the truck's services be needed such that the two alternatives are equally costly? days Carry all interim calculations to 5 decimal places and then round your final answer up to the nearest day. The tolerance is 14. Attempts: 0 of 3 used Save for Later Submit Answer
A Company is considering two alternatives with regards to an equipment which it needs. The alternatives are as follows: Alternative A; Purchase Cost of equipment Salvage value Daily operating cost Economic life, years P700,000 100,000 500 10 Alternative B: Rental at P1,500 per day At 18% interest, how many days per year must the equipment be in use if Alternative A is to be chosen.
A firm is considering three mutually exclusive alternatives as a part of an upgrade to an existing transportation network. If the MARR is 10% per year, which alternative(if any) should be chosen using the IRR analysis procedure? Use trial & error and show your calculations. A B C Initial Cost 40000 30000 20000 Annual Revenue 10400 8560 7750 Annual Cost 4000 3000 2500 Salvage Value 3000 2500 2000 Useful Life 20 20 10
A firm is considering three mutually exclusive alternatives as part of an upgrade to an existing transportation network. If the MARR is 10% per year, which alternative (if any) should be chosen using the IRR analysis procedure? Use trial & error and show your calculations. A B Initial Cost Annual Revenue Annual Cost Salvage Value Useful Life 40,000 10,400 4,000 3,000 30,000 8,560 3,000 2,500 20,000 7,750 2,500 2,000 20 20 10
A firm is trying to decide which of two machines to purchase as described in in the table below. Using the interest rate 9% or 0.09, use present worth analysis to determine which machine, if either, should be purchased. Show all your work. Machine: A - B First Cost: $800 - $600 Annual Net Benefit: $130 - $230 Salvage Value: $40 - $20 Usefil Life (years): 9 - 3
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Company C is seeking for help to decide this option to choose to upgrade their current bottleneck equipment. There are two vendors and one rental option. The cost details are shown in the table below. Vender R 75000 28000 Option Initial Cost Annual Operation Cost Salvage Value 0 Estimated Life in Year 2 MARR = 10% per year compounded monthly. Vender T 125000 12000 30000 3 Rental 0 52000 0 Maximum 3 years 1. Select from the two sales vendors using the LCM and PW analysis. 2. Determine which of the three options is cheaper over a 3 year study period.
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2. It is rëquired to select one of the three machines. Which machine should be selected, based on the present worth comparison at an interest rate of 12% per year, if the costs are shown below? Туре X 7,650 1,200 Туре Y 12,900 900 2,000 Туре Z 17,000 750 First cost, $ Maintenance cost,.( $ lyear) Salvage value, ( $) Economic (years) 4,000 12 4
Consider the following alternatives for a heating system: Alternative A: Rent a heating system at a cost of $500 per year over a 10-year period. Installation charge of $300 and no salvage value. It is expected to provide energy savings of $200 per year. Alternative B: Purchase a heating system for a total cost of $3,600, including installation. It has a salvage value of $1000 after 10 years of service, and is expected to provide energy savings of $500 per year. Alternative C: Purchase a heating system for a total cost of $8,000, including installation. Half of the cost is paid now and the other half is paid at the end of three years. It has a salvage value of $1.000 after 10 years and is expected to provide energy savings of $1,000 per year. For a MARR of 12%. which heating system should be installed?
A network company is planning to install a Fiber optic lines going to an island. What is the more economical on the two? Use EUAC when comparing. TROUGH LAND THROUGH WATER Initial cost per Km 235000 420500 Annual Maintenance per Km 12300 18000 Rate of Interest 10% 10% Length, Km 30 15 salvage Value per Km 23500 55500 Lifespan 20 20
Two types of power converters are under consideration for a specific application. An economic comparison is to be made using a MARR of 10% and the following cost estimates: Alternative Model A Model B Service Life (Years) 5 10 First Cost $10,000 $20,000 Salvage Value 0 5,000 Annual Operating Cost 2,500 1,200 Draw the Cash Fiow Diagram for each alfernative covering the entire analysis period. Compute the Net Present Worth for Model A? Compute the Net Equivalent Uniform Annual Worth for Model A? Which of these alternatives should be selected?