2. As the supervisor of a facilities engineering department, you consider mobile cranes to be critical equipment. The purchase of a new medium-sized, truck-mounted crane is being evaluated. The economic estimates for the two best alternatives are shown in the following table. Alternatives A B $272,000 $346,000 28,800 19,300 6 9 $40,000 Capital investment Annual expenses" Useful life (years) Market value (at end of life) $25,000 "Excludes the cost of an operator, which is the same for both alternatives. You have selected the longest useful life (nine years) for the study period and would lease a crane for the final three years under Alternative A. On the basis of previous experience, the estimated annual leasing cost at that time will be $66,000 per year (plus the annual expenses of $28,800 per year). The MARR is 15% per year. Show that the same selection is made with d. Would leasing crane A for nine years, assuming the same costs per year as for three years, be preferred over your present selection? (E = MARR = 15%).

Power System Analysis and Design (MindTap Course List)
6th Edition
ISBN:9781305632134
Author:J. Duncan Glover, Thomas Overbye, Mulukutla S. Sarma
Publisher:J. Duncan Glover, Thomas Overbye, Mulukutla S. Sarma
Chapter6: Power Flows
Section: Chapter Questions
Problem 6.43P
icon
Related questions
Question
100%

I need help with part did please and thank you.  Steps would be helpful. 

2. As the supervisor of a facilities engineering department, you consider mobile cranes to be critical
equipment. The purchase of a new medium-sized, truck-mounted crane is being evaluated. The
economic estimates for the two best alternatives are shown in the following table.
Alternatives
A
B
$272,000 $346,000
Capital investment
Annual expenses"
Useful life (years)
28,800
19,300
6
9
Market value (at end of life) $25,000
$40,000
"Excludes the cost of an operator, which is the same for
both alternatives.
You have selected the longest useful life (nine years) for the study period and would lease a crane
for the final three years under Alternative A. On the basis of previous experience, the estimated
annual leasing cost at that time will be $66,000 per year (plus the annual expenses of $28,800 per
year). The MARR is 15% per year. Show that the same selection is made with
d. Would leasing crane A for nine years, assuming the same costs per year as for three
years, be preferred over your present selection? (E = MARR = 15%).
Transcribed Image Text:2. As the supervisor of a facilities engineering department, you consider mobile cranes to be critical equipment. The purchase of a new medium-sized, truck-mounted crane is being evaluated. The economic estimates for the two best alternatives are shown in the following table. Alternatives A B $272,000 $346,000 Capital investment Annual expenses" Useful life (years) 28,800 19,300 6 9 Market value (at end of life) $25,000 $40,000 "Excludes the cost of an operator, which is the same for both alternatives. You have selected the longest useful life (nine years) for the study period and would lease a crane for the final three years under Alternative A. On the basis of previous experience, the estimated annual leasing cost at that time will be $66,000 per year (plus the annual expenses of $28,800 per year). The MARR is 15% per year. Show that the same selection is made with d. Would leasing crane A for nine years, assuming the same costs per year as for three years, be preferred over your present selection? (E = MARR = 15%).
Expert Solution
steps

Step by step

Solved in 2 steps with 1 images

Blurred answer
Knowledge Booster
Economic load dispatch
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, electrical-engineering and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Power System Analysis and Design (MindTap Course …
Power System Analysis and Design (MindTap Course …
Electrical Engineering
ISBN:
9781305632134
Author:
J. Duncan Glover, Thomas Overbye, Mulukutla S. Sarma
Publisher:
Cengage Learning