A large standby electricity generator in a hospital operating room has a first cost of $79,500 and may be used for a maximum of 6 years. Its salvage value, which decreases by 15% per year, is described by the equation S=79,500 (1-0.15), where n is the number of years after purchase. The operating cost of the generator will be constant at $8,500 per year, and the interest rate is 12% per year. Determine the economic service life and associated AW values. The economic service life is years and the AW value is $-
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- Gardner Denver Company is considering the purchase of a new piece of factory equipment that will cost $420,000 and will generate $95,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further Instructions on internal rate of return in Excel, see Appendix C.Caduceus Company is considering the purchase of a new piece of factory equipment that will cost $565,000 and will generate $135,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further instructions on internal rate of return In Excel, see Appendix C.If a copy center is considering the purchase of a new copy machine with an initial investment cost of $150,000 and the center expects an annual net cash flow of $20,000 per year, what is the payback period?
- Conestoga Plumbing plans to invest in a new pump that is anticipated to provide annual savings for 10 years of $50,000. The pump can be sold at the end of the period for $100,000. What is the present value of the investment in the pump at a 9% interest rate given that savings are realized at year end?A restaurant is considering the purchase of new tables and chairs for their dining room with an initial investment cost of $515,000, and the restaurant expects an annual net cash flow of $103,000 per year. What is the payback period?A construction firm needs a new small loader. It can be purchased for $20,000. The firm expects the loader to have a salvage value of $6,000 after 7 years. The maintenance cost will be $1,400 each year. The firm's interest rate is 1% per year. Compute the Equivalent Uniform Annual Worth (EUAW).
- A large standby electricity generator in a hospital operating room has a first cost of $67,250 and may be used for a maximum of 6 years. Its salvage value, which decreases by 15% per year, is described by the equation S = 67,250(1 − 0.15)n, where n is the number of years after purchase. The operating cost of the generator will be constant at $9,000 per year, and the interest rate is 12% per year. Determine the economic service life and associated AW values. The economic service life is 6 years and the AW value is $−__.The costs associated with a small X-ray inspection system are $40,000 now and $24,000 per year, with a $6000 salvage value after 3 years. Determinethe equivalent annual cost of the system if the real interest rate is 10% per year and the inflation rate is 4% per year.You are considering purchasing a dump truck. The truck will cost $45,000 and have operating and maintenance costs that start at $15,000 in the first year and increase by $2,000 per year thereafter. Assume that the salvage value at the end of five years is $9,000 and the interest rate is 12%. Determine the equivalent annual cost of owning and operating the truck.
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