Westdale Manufacturing is reviewing two mutually exclusive options for new equipment with a MARR of 16%. The lower cost option A has an initial cost of $100,000 with an annual savings of $25,000. The higher cost option B has an initial cost of $167.100 with annual savings of $35,000. Both have a service life of 10 years with no salvage value. Calculate the incremental rate of return AIRR (B-A) for this project.

Apricot Computers is considering replacing its material handling system and either purchasing or leasing a new system. The old system has an annual operating and maintenance cost of $31,000, a remaining life of 8 years, and an estimated salvage value of $5,300 at that time. A new system can be purchased for $259,000; it will be worth $24,000 in 8 years; and it will have annual operating and maintenance costs of $16,000/year. If the new system is purchased, the old system can be traded in for $19,000. Leasing a new system will cost $25,000/year, payable at the beginning of the year, plus operating costs of $7,100/year, payable at the end of the year. If the new system is leased, the old system will be sold for $9,000. MARR is 15%. Compare the annual worths of keeping the old system, buying a new system, and leasing a new system based upon a planning horizon of 8 years. Click here to access the TVM Factor Table Calculator For calculation purposes, use 5 decimal places as displayed in the…

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Two traffic signal systems are being considered for an intersection. One system costs $31,000 for installation and has an efficiency rating of 80%, requires 26 kW power (output), incurs a user cost of $0.23 per vehicle, and has a life of 9 years. A second system costs $47,000 to install, has an efficiency rating of 87%, requires 34 kW power (output), has a user cost of $0.19 per vehicle, and has a life of 17 years. Annual maintenance costs are $75 and $95, respectively. MARR = 8% per year. How many vehicles must use the intersection to justify the second system when electricity costs $0.09/kWh? Assume salvage value for each system equals zero. Project the difference in the user cost as savings for the second system. There are approximately 8,760 hours/year. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year. At least 108000 vehicles per day must use the intersection to justify the second system. (Round up to the nearest whole…