A new bottle-capping machine costs 65,000, including 8,000 for installation. The machine is expected to have a useful life of eight years with no salvage value at that time (assume straight-line depreciation). Operating and maintenace costs are expecte to be 3,500 for the first year, increasing by 2,000 each year thereafter. Interest is 10%. Construct a spreadsheet that has the following headings: Year, Salvage Value, Maintenance Costs, EAC (Capital Costs), EAC (Operating Costs), and EAC (Total Costs). Compute the EAC (Total Costs) if the bottle capper is kept for n years, n = 1,...,8. What is the economic life of the bottle capper (in years)? Complete the row of the table indicating the economic life for this project NOTE: Use 5 significant figures in your calculations, and round your answers for the table below to the nearest dollar.

A new bottle-capping machine costs 65,000, including 8,000 for installation. The machine is expected to have a useful life of eight years with no salvage value at that time (assume straight-line depreciation). Operating and maintenace costs are expecte to be 3,500 for the first year, increasing by 2,000 each year thereafter. Interest is 10%. Construct a spreadsheet that has the following headings: Year, Salvage Value, Maintenance Costs, EAC (Capital Costs), EAC (Operating Costs), and EAC (Total Costs). Compute the EAC (Total Costs) if the bottle capper is kept for n years, n = 1,...,8. What is the economic life of the bottle capper (in years)? Complete the row of the table indicating the economic life for this project NOTE: Use 5 significant figures in your calculations, and round your answers for the table below to the nearest dollar.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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