You need to select a machine for the robotized welding process at your factory. There are two machines in market that can do this job, machine A and machine B. Machine A: First cost is $63,000 , Annual Operating Cost is $4,000, and Salvage value of $15,000 with useful life of 3 years. If the life of machine B is 9 years, the NPV of machine A needed for the sake of comparison at MARR 15% per year is closest to:
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You need to select a machine for the robotized welding process at your factory. There are two machines in market that can do this job, machine A and machine B. Machine A: First cost is $63,000 , Annual Operating Cost is $4,000, and Salvage value of $15,000 with useful life of 3 years. If the life of machine B is 9 years, the NPV of machine A needed for the sake of comparison at MARR 15% per year is closest to:
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- A casting company is considering the replacement analysis of a furnace. If it is bought from A factory, annual operating and maintenance costs will be 50.000 TL/year. It can be kept for 10 years. The purchase cost is 300.000 TL. The scrap value is 15.000 TL. If the furnace is bought from the B factory, the annual operating and maintenance cost will be 30.000 TL/year. Economical life of this machine is 5 years. The purchase cost is 250.000 TL and the Scrap Value is 25.000 TL. Capital cost is 25% for two factories. Based on these data, what will be the present value (TV) of the annual operating expense of alternative A? A) 188525 B) 198525 C) 178525 D) 158525 E) 168525A new manufacturing facility will produce two products, each of which requires a drilling operation during processing. Two alternative types of drilling machines (D1 and D2) are being considered for purchase. One of these machines must be selected. For the same annual demand, the annual production requirements (machine hours) and the annual operating expenses (per machine) are listed in the shown Table. Which machine should be selected if the MARR is 15% per year? Show all your work to support your recommendation. Assumptions: The facility will operate 2,000 hours per year. Machine availability is 80% for Machine D1 and 75% for Machine D2. The yield of D1 is 90%, and the yield of D2 is 80%. Annual operating expenses are based on an assumed operation of 2,000 hours per year, and workers are paid during any idle time of Machine D1 or Machine D2. State any other assumptions needed to solve the problem.In a bio-based material recycling company, the operation managers are considering a twin-screw extruder with a price of 12,000 OMR and another 2,000 OMR will be spent for shipping and installation of the extruder. The estimated net income generated from this machine is 3,500 OMR per year. The extruder will be used for 5 years, and then it will be sold for an estimated market value of 2,500 OMR. The extruder MARCS property class is 5 years. If the effective income tax rate (t) is 40% and the after-tax MARR is 10%. (a) What is the after-tax IRR for this project? (use trial and error procedure and GDS) (b) Should this extruder be purchased by the company?
- Old Southwest Canning Co. has determined that any one of four machines can be used in its chilicanning operation. The cost of the machines are estimated below, and all machines have a 5-year life. If the minimum attractive rate of return is 25% per year, determine which machine should be selected on the basis of a rate of return analysis. Machine First Cost, $ AOC, $ 1 −28,000 −20,000 2 −51,000 −12,000 3 −32,000 −19,000 4 −33,000 −18,000A new biomaterial used for prosthetic devices was developed by engineers in the laboratory that requires production equipment to start manufacturing. Two different equipment are considered. Equipment A will have an initial cost of $125,000 and annual cost of $55,000. Equipment B will have an initial cost of $175,000 and an annual cost of $35,000. For 20% MARR which process should be selected. What is the incremental rate of return?An equipment costing $57,500 is being considered for a production process at Dew Chemicals. The expected benefits per year is $4,500 and estimated salvage value is $10,000. Determine the rate of return the company can get in this equipment proposal. Equipment life = 15 years.
- An assembly operation at a software company now requires $100,000 per year in labor costs. A robot can be purchased and installed to automate this operation. The robot will cost $200,000 and will have no market value at the end of the 10-year study period. Maintenance and operation expenses of the robot are estimated to be $64,000 per year. Invested capital must earn at least 12% per year. Use the IRR method to determine if the robot is a justifiable investment.Two machines are being considered for the production of a particular part for which there is a long term-demand. Machine A cost P50,000.00 and is expected to last 3 years and have a P10,000 salvage value. Machine B costs P75,000.00 and is expected to last 6 years and have zero salvage value. Machine A can produce a part in 18 seconds; Machine B requires only 12 seconds per part. The out-of-pocket hourly cost of operation is P38.00 for A and P30.00 for B. Monthly Maintenance cost are P200.00 for A and P220.00 for B. If interest on invested capital is 25%, determine the number of parts per year at which the machines are equally economical. If the expected number of parts per year is greater than this break-even quantity, which machine would be favored?A mining company need to decide which of the equipment models to use in a project that will last for 4 years. The company required return on investment is 5%. Each model can be sold for a salvage value and replaced period. The purchasing cost, operational cost and salvage value of the two models as follows: an identical machine with the same cost and cash flow as many times as needed and at any given • Model A costs $15,000 and requires annual operational cost of $2,000. The model operable for 2 years and at the end of the year 2, its estimated salvage value is $1,500. • Model B costs $30,000 and requires annual operational cost of $1,000. The model operable for 6 years and at the end of the year 4, its estimated salvage value is $2,500. Model A Model B -15,000 -30,000 1 -2,000 -1,000 2 -2,000 + 1,500 -1,000 3 -1.000 4 -1,000+ 2,500 Which model the company should use? (Select the correct statement) O Select Model A because it will save around $2,182 in present worth over the required…
- Dexcon Technologies, Inc., is evaluating two alternatives to produce its new plastic filament with tribological (i.e., low friction) properties for creating custom bearings for 3-D printers. The estimates associated with each alternative are shown below. Using a MARR of 15.00% per year, which alternative has the lower present worth? (Include a minus sign if necessary.) Method First Cost M&O Cost, per Year Salvage Value Life DDM $-160000 $-60000 $2000 2 years The present worth for the DDM method is $ The present worth for the LS method is $ The LS method is selected. LS $-340000 $-35000 $27000 4 yearsDick Dickerson Construction, Inc. has asked you to help them select a new backhoe. You have a choice between a wheel-mounted version, which costs $60,000 and has an expected life of 5 years and a salvage value of $2000, and a track-mounted one, which costs $80,000, with a 7-year life and an expected salvage value of $10,000. Both machines will achieve the same productivity. Interest is 8%. Which one will you recommend? Use an annual worth analysis.The equivalent annual worth of the process currently used in manufacturing motion controllers is AW = $-62,000 per year. A replacement process is under consideration that will have a first cost of $64,000 and an operating cost of $38,000 per year for the next 3 years. Three different engineers have given their opinion about what the salvage value of the new process will be 3 years from now as follows: $10,000, $13,000, and $18,000. Is the decision to replace the process sensitive to the salvage value estimates at the company’s MARR of 15% per year?