1) A company wants to purchase a machine that has the following probable cash flows. It is expected to have a useful life of 10 years and a MARR of 5%. Determine the expected value of the NPw of the machine. The first cost is $32,000 Annual Costs Salvage Value p= 60% 2$ 2,000 2$ 15,000 | $ p= 40% 3,000 10,000 $

1) A company wants to purchase a machine that has the following probable cash flows. It is expected to have a useful life of 10 years and a MARR of 5%. Determine the expected value of the NPw of the machine. The first cost is $32,000 Annual Costs Salvage Value p= 60% 2$ 2,000 2$ 15,000 | $ p= 40% 3,000 10,000 $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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P 5 5 S 2 10 20 30 A 40 8⁰ ·So + Soc. = MC + Soc. 5o= MC 60 Do = MB 70 80 38
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Engineering Economy Calculate the Present Worth. Don't use Excel You bought a new car which you intend to use as a public utility vehicle for P950,000. The expected life of the car is ten (10) years for its intended use. Your driver and you agreed that for the first five (5) years , your “boundary” is P1,500.00 per day and P1,000.00 per day for the rest of its economic life. You also expected a repair and maintenance costs of P30,000 every six (6) months from year one (1) to five (5) and P50,000 from year six (6) to ten (10). At the end of 10 years you can sell the car for P100,000. If your MARR on invested capital is 15% every (6) months, determine whether this is a good investment. Use the Annual Worth , Present Worth , or the Future Worth method in your solution. Indicate all other assumptions you use in your analysis.