ENGINEERING FUNDAMENTALS
ENGINEERING FUNDAMENTALS
6th Edition
ISBN: 9781337705011
Author: MOAVENI
Publisher: CENGAGE L
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Chapter 20, Problem 19P
To determine

Find the project that would be approved if each project generates the same income.

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Attach a complete solution. Draw the cash flow diagram.Calculate the capitalized cost of a project that has an initial cost of P8,000,000 and an additional cost of P250,000 at the end of every 8 years. The annual operating costs will be P150,000 at the end of every year for the first 5 years and P200,000 thereafter. In addition there is expected to be recurring major rework cost of P500,000 every 13 years. Assume i=12%
Determine the capitalized cost of a research laboratory which requries P5,000,000 for original construction; P100,000 at the end of every year for the first 5 years and then P120,000 each year thereafter for operating expenses, and P500,000 every 6 years for replacement of equipment with interest at 12% per annum? a. 6441350 b. 6067015 c. 6632445 d. 6573650 e. none of the above
The purchase cost of an excavating machine is $200,750. After a useful life of 6 years, it is assumed the equipment will be sold for $45,000. Assume interest of 9.5% for borrowing money and 3.2% for taxes, insurance and storage. Using the sinking fund depreciation method, calculate the annual ownership cost in Year 2 and the cost per hour in Year 1, assuming the equipment will be used for 2000 hr/year.
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