U.S. Steel is considering a plant expansion to produce austenitic, precipitation hardened, duplex, and martensitic stainless steel round bars that is expected to cost $18 million now and another $10 million 1 year from now. If total operating costs will be $1.4 million per year starting 1 year from now, and the estimated salvage value of the plant is virtually zero, how much must the company make annually in years 1 through 9 to recover its investment plus a return of 24% per year? The company must make $ return of 24% per year. million annually in years 1 through 9 to recover its investment plus a

An outboard motor has an initial price of $1,080. A service contract costs $350 for the first year and increases $130 per year thereafter. The total cost of the outboard motor (in dollars) after n years is given by C(n) = 1,080 + 150n + 30n“, where n21. Complete parts (A) through (C). (A) Write an expression for the average cost per year, C(n), for n years. C(n) =O %D

Avian Air Cargo is considering an investment of $10,000,000 with life expectancy of 10 years and annual operating cost of $400,000 in Year 1 with an $50,000 per year starting in Year 2 through the life of the project. Avian Air Cargo anticipates a revenue stream of $2,500,000 per year for 20 years I 12%, what is the rate of return for this project and is it economically justified? It is NOT economically justified because the rate of return is between 14% and 15%. It IS economically justified because the rate of return is between 10% and 11%. It is NOT economically justified because the rate of return is between 10% and 11%. It IS economically justified because the rate of return is between 14% and 15% of MARR

Your firm is thinking about investing $300,000 in the overhaul of a manufacturing cell in a lean environment. Revenues are expected to be $39,000 in year one and then increasing by $13,000 more each year thereafter, Relevant expenses will be $20,000 in year one and will increase by $10,000 per year until the end of the cell's nine-year life. Salvage recovery at the end of year nine is estimated to be $10,000. What is the annual equivalent worth of the manufacturing cell if the MARR is 10% per year? How sensitive is the annual worth to ± 10% changes in the MARR? Are changes in the MARR really a significant consideration in this problem? Click the icon to view the interest and annuity table for discrete compounding when the MARR is 9% per year. E Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 11% per year. Find Annual Equivalent…

Mitchell Manufacturing purchased new material handling equipment for $28,000,000. The annual maintenance cost for the equipment will be $1,500,000. Mitchell Mfg. expects to generate extra annual revenue of $5,000,000 per year. The payback period to make a return of 8% per year is closest to: O 6 years O 11 years 13 years O 7 years O 9 years