Determine the capitalized cost of a machine that was purchased for P100, 000 and requires annual maintenance of P18, 000 if interest is 8%. a. 315, 000 b. 325, 000 C. 335, 000 d. 345, 000
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- Urgently need. You are considering purchasing a dump truck. The truck will cost $75,000 and have operating and maintenance costs that start at $18,000 the first year and increases by $2,000 per year. Assume that the salvage value at the end of five years is $22,000 and interest rate is 15%. What is the capital recovery cost with return at 15% over the 5 years?A company is considering purchasing either machine A or B, given that MARR is 10%, and the company projected sales is 40,000 units. Machine A Machine B $90,000 $39,000 $1100 +.02xunits $600 +0.03xunits Initial cost $70,000 $40,000 $1000+0.03xunit $500+0.05xunit 8 years $15,000 Annual revenues Annual Operation cost Annual Maintenance cost 6 years $10,000 Life span Salvage value Draw the cash fiow diagram for each machine. a. b. Compute ERR for each machine, based on computed ERRS, which machine is to be selected7 Explain the difference between the IRR & ERR methods as explained in the lecture.A company is considering buying one of the following two computers. Computer Computer Initial Cost $9,571.44 $13,882.9 Salvage $1,896.27 $3,604.11 Value Useful Life 10 years 13 years $ 281.64 $213.58 Annual year 1 to (Year 1 to 8) Maintenance 10 $378.24 (Year 9 to 13) Interest Rate 6% 6% If computer B was to be purchased and kept forever (after year 13) without any change in the annual maintenance cost, what would be the present worth of all expenditures?
- A transit system is considering buying 6 more buses to provide better service. It will cost $100,000 for buying a new bus and $15,000 per year for maintenance and operation for the following 8 years. If the city’s MARR is 8%, what is the equivalent uniform annual cost of this project? Assume the bus has no value at the end of 8 years.A company is considering the purchase of a fleet of % ton pickup trucks for their contracting business. The owner is trying to decide whether to purchase the trucks with diesel or gas engines. The company specifies an intermal rate of return on equipment purchases of 6% . The owner estimates the following cash flows of costs for a gas and diesel equipped truck. What is the EUAC of the Diesel Truck? Gas Diesel Purchase Purchase Year Fuel Fuel Maintain Maintain $30,000 $250 $300 $39,000 $6,750 $5,000 $1,000 $5,000 $1,500 1 $500 $6,750 $6,750 2 3 $350 $5,000 4 $400 $6,750 $2,000 $5,000 $2,500 $5,000 $3,000 $5,000 $3,500 $5,000 $4,000 | $5,000 5 6. Note: no need to find the common useful life when using EUAC.Moving another question will save this response. Question 3 A project with the following costs are under consideration to determine its profitability. Using the IRR comparison, and an annual MARR of 10% compounded semiannually, determine if the project should be executed First cost Semiannual operating cost $45,000 $10,000 Semiannual income $20,000 Salvage value Life in years Oa. IRR = 17% semiannual $20,000 4 years O b. IRR = 18.7% semiannual O IRR = 16.9% semiannual Od. IRR = 15 3% semiannual Moving to another question will save this response. Question 3 a 25 points Save Question 3 of 4
- If one account receives a benefit in the form of cash, goods or services etc, there must be equal loss of benefit by another account. This refers to? a. bookkeeping b. single entry system c. accounting d. double entry system A corporate jet costs $1,350,000 and will incur $200,000 per year in maintenance costs. The jet can be sold for $650,000 after 5 years. What is the capital recovery? MARR = 15% a. $506,310 b. $306,310 c. $270,000 d. $650,000An equipment is bought for $9,000 and sold at the end of its service life for $800. If the service period is 10 years and the MARR is 10%, then the minimum annual savings that this equipment must yield for it to break even is closest to? a) $1,414 b) $1,701 c) $1,312 O d) $1,514A food processing plant consumed 600,000 kW of electric energy annually and pays an average ofP2.00 per kWh. A study is being made to generate its own power to supply the plant the energy required, and that the power plant installed would cost P2,000,000. Annual operation andmaintenance,P800,000. Other expenses P100,000 per year. Life of power plant is 15 years; salvage value at the end of life is P200,000 annual taxes and insurances, 6% of first cost; and rate of interest is 15%. Using the sinking fund method for depreciation, determine if the power plant is justifiable. Compute using the present worth, annual worth, and rate of return.
- Q4. [ remaining useful life) are shown in the table below. Assume the MARR is 10% per year. Based on this information, - ] The present worth of the cash flows through year k, PWk for a defender (3- year What is the economic life and the related minimum equivalent uniform annual cost, EUAC, for the defender? a. b. Compute marginal cost, show your calculations and fill the table below. Year(k) Total (marginal) cost PWk EUAC -$14,020 -$28,100 3 -$43,075Engineering economy - ENGR 3322 The International Parcel Service has installed a new radio frequency identification system to help reduce the number of packages that are incorrectly delivered. The capital investment in the system is $65,000, and the projected annual savings are tabled below. The system’s market value at the EOY five is negligible, and the MARR is 18% per year. Calculate the return on investment of the project a. 35% b. 36% c. 37% d. None of the choices10. A proposed engineering project requires an initial investment of P850 000.00 and yearly expenses of P50 000.00 for the next three years. Estimated revenue is P235 000.00 annually from the fifth to the fourteenth year. Determine project acceptability using the ERR method and an 11% MARR. (Ans. Project is not acceptable, 10.49%)