Your firm is thinking about investing $200,000 in the overhaul of a manufacturing cell in a lean environment. Revenues are expected to be $36,000 in year one and then increasing by ​$12,000 more each year thereafter. Relevant expenses will be $5,000 in year one and will increase by $2,500 per year until the end of the​ cell's five​-year life. Salvage recovery at the end of year five is estimated to be $8,000. What is the annual equivalent worth of the manufacturing cell if the MARR is 12​% per​ year?

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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Your firm is thinking about investing $200,000 in the overhaul of a manufacturing cell in a lean environment. Revenues are expected to be $36,000 in year one and then increasing by ​$12,000 more each year thereafter. Relevant expenses will be $5,000 in year one and will increase by $2,500 per year until the end of the​ cell's five​-year life. Salvage recovery at the end of year five is estimated to be $8,000. What is the annual equivalent worth of the manufacturing cell if the MARR is 12​% per​ year?

More Info
Discrete Compounding; i= 12%
Single Payment
Uniform Series
Uniform Gradient
Gradient
Compound
Amount
Present
Compound
Amount
Present
Sinking
Fund
Capital
Recovery
Factor
To Find A
Gradient
Uniform
Worth
Worth
Present
Series
Factor
Factor
Factor
Factor
Factor
Worth Factor
Factor
To Find P To Find A
Given G
P/G
To Find F
To Find P
To Find F
To Find P
To Find A
Given F
P/F
Given P
Given A
Given A
Given F
Given P
Given G
F/P
FIA
P/A
A/F
A/P
A/G
1
1.1200
0.8929
1.0000
0.8929
1.0000
1.1200
0.0000
0.0000
2
1.2544
0.7972
2.1200
1.6901
2.4018
0.4717
0.5917
0.7972
0.4717
3
1.4049
0.7118
3.3744
0.2963
0.4163
2.2208
0.9246
4
1.5735
0.6355
4.7793
6.3528
8.1152
3.0373
0.2092
0.3292
4.1273
1.3589
1.7623
0.5674
3.6048
0.1574
0.2774
6.3970
1.7746
6
1.9738
0.5066
4.1114
0.1232
0.2432
8.9302
2.1720
7
2.2107
0.4523
10.0890
4.5638
0.0991
0.2191
11.6443
14.4714
2.5515
8
2.4760
0.4039
12.2997
4.9676
0.0813
0.2013
2.9131
9
2.7731
5.3282
0.3606
0.3220
14.7757
0.0677
0.1877
17.3563
3.2574
10
3.1058
17.5487
5.6502
0.0570
0.1770
20.2541
3.5847
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Transcribed Image Text:More Info Discrete Compounding; i= 12% Single Payment Uniform Series Uniform Gradient Gradient Compound Amount Present Compound Amount Present Sinking Fund Capital Recovery Factor To Find A Gradient Uniform Worth Worth Present Series Factor Factor Factor Factor Factor Worth Factor Factor To Find P To Find A Given G P/G To Find F To Find P To Find F To Find P To Find A Given F P/F Given P Given A Given A Given F Given P Given G F/P FIA P/A A/F A/P A/G 1 1.1200 0.8929 1.0000 0.8929 1.0000 1.1200 0.0000 0.0000 2 1.2544 0.7972 2.1200 1.6901 2.4018 0.4717 0.5917 0.7972 0.4717 3 1.4049 0.7118 3.3744 0.2963 0.4163 2.2208 0.9246 4 1.5735 0.6355 4.7793 6.3528 8.1152 3.0373 0.2092 0.3292 4.1273 1.3589 1.7623 0.5674 3.6048 0.1574 0.2774 6.3970 1.7746 6 1.9738 0.5066 4.1114 0.1232 0.2432 8.9302 2.1720 7 2.2107 0.4523 10.0890 4.5638 0.0991 0.2191 11.6443 14.4714 2.5515 8 2.4760 0.4039 12.2997 4.9676 0.0813 0.2013 2.9131 9 2.7731 5.3282 0.3606 0.3220 14.7757 0.0677 0.1877 17.3563 3.2574 10 3.1058 17.5487 5.6502 0.0570 0.1770 20.2541 3.5847 Print Done
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