Acad business that is considering its first project. The required equipment investment by the company is $50,000 (CCA class 39) with an expected revenue of $20,000 in year 1, increasing by 5%/year for the 5-year life of the project. Costs in year 1 are expected to be $5000, increasing by 3%/year for the 5-year life of the project. The salvage value of the equipment at the end of the five years is $5000 and the tax rate is 40%. a) What is the

Acad business that is considering its first project. The required equipment investment by the company is $50,000 (CCA class 39) with an expected revenue of $20,000 in year 1, increasing by 5%/year for the 5-year life of the project. Costs in year 1 are expected to be $5000, increasing by 3%/year for the 5-year life of the project. The salvage value of the equipment at the end of the five years is $5000 and the tax rate is 40%. a) What is the

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

A piece of asset was purchased 4 years ago. Current market value is now $13,000. Estimated Future Market Values and AOC's: (Assume the interest rate is 10% per year) are as follows. Market EOY value, $ AOC 1 9000 2500 8000 2700 6000 3000 4 2000 3500 4500 What is the ESL? 2 years 3 years 4 years 45years
ligthing first cost of investment is $120,000. annual mtnce expenses are expected to be $6600 for the first 22 years and $9000 for each year thereafter. N=infinety amt of time, interest,i=12% per year, what is the capatalized cost of this project? the annuity table for value N=22 as follows: F/P=12.1003 P/F=.0826 P/A=7.6446 I tried mutliple ways to show and I can't figure it out. the answer is $176,653. Any suggestions is greatly appreciated. Thanks
Which alternative in the table below should be selected when the MRR = 6% per year? The life of each Kalternative is 10 years. Increment Considered A Investment cost A (Annual Revenues less. Costs) IRR on A Investment Cost A(A-DN) $800 $154 14.1% The IRR on A(C-B) is %. (Round to one decimal place.) A(B-A) $700 $114 10.0% A(C-B) $1,100 $170 ? A(D-C) $1,300 $130 2
An oil company is planning to install a new 80 mm pipeline to connect storagetanks to a processing plant 1500 m away. The connection will be needed for theforeseeable future. Refer to their costs incurred below:initial cost: RM15,000service life: 12 yearssalvage value: RM200one-off saving in year 8: RM 300annual profit: RM400annual pump operation hours: 450 hourspump cost per hours: RM2.50Calculate the single project evaluation using Benefit Cost Ratio PW analysismethod, which is preferred if the MARR is 7%. Draw the cashflow diagram.
Airodyne Wind, Inc., has wind tunnels that can operate vertically or horizontally for evaluating the effects of air flow on a component's PCB response and reliability. The company expects to build a new tunnel that will be outfitted with multiple sensor ports. For the estimates below, calculate the equivalent annual cost of the project. First Cost Replacement Cost, Year 2 AOC per Year Salvage Value Life, Years Interest Rate The equivalent annual cost of the project is $ $-370,000 $-350,000 $-930,000 $275,000 4 9%
A large textile company is trying to decide which sludge dewatering process it should use ahead of its sludge drying operation. The costs associated with centrifuge and belt press systems are shown. Compare them on the basis of their annual worths using an interest rate of 10% per year. System First cost, $ Centrifuge -250,000 -31,000 Belt Press -170,000 -35,000 -26,000 10,000 4 AOC, $/year Overhaul in year 2, $ Salvage value, $ Life, years The annual worth of the centrifuge system is $- The system selected on the basis of the annual worth analysis is the (Click to select) ✓ system. 40,000 6 and the annual worth of the belt press system is $-
A university lab is a research contractor to NASA for in-space fuel cell systems that are hydrogen- and methanol-based. During lab research, three equal-service machines need to be evaluated economically. Perform the present worth analysis with the costs shown below. The MARR is 10% per year. Electric-Powered Gas-Powered Solar-Powered First cost, $ Annual operating cost (AOC), $/year Salvage value S, $ Life, years -4500 -3500 -6000 Solution: -900 -700 -50 200 350 100 8 8
QUESTION 8 Two processes can be used for producing a polymer that reduces friction loss in engines. Which process should be selected on the basis of a present worth analysis using the LCM, at an interest rate of 10% per year? Answer the below questions to select the best Option. Process A Process B First cost, $ 1,397,151 534,579 Annual operating cost, $ per year 90,383 32,000 Salvage value, $ 80,000 130,000 Update cost at year 2, $ 15,000 Life, years 4 8 EGN 3212 - Eco PW for Process A-
YOLO Construction Co. is planning to purchase a new truck Company uses MARR as 10%% per year. Evaluate the following two altematives by Present Worth Analysis using Least Common Multiple (LCM) technique. Select the PW value of Alternative A First Cost, $ -170000 -130000 Annual Income, S/year 22000 and increasing starting from year 1 by $500 each year 29000 Annual Cost, S/year -7000 -11000 Major Maintenance Cost, every 3 years, S Salvage Value, S Life, years |-10000 17000 10000 4 Select one: O a. -195520.8 O b. -146445.8 O c. -116200 O d. -191185 O é. -142110
Data for two 50-hp motors are as follows: Alpha motor Beta motor Original cost P37 500 P48 000 Annual maintenance 1500 750 Life, years Efficiency 10 10 87% 92 % Taxes and insurance 3% 3% Power cost is P2 per kWh. If money is worth 20%, how many hours per year would the motors have to be operated at full load for them to be equally economical? If the expected number of hours of operation per year exceeds the break-even point, which motor is more economical?
K Dexcon Technologies, Inc., is evaluating two alternatives to produce its new plastic filament with tribological (ie, low friction) properties for creating custom bearings for 3-D printers. The estimates associated with each alternative are shown below. Using a MARR of 15% per year, which alternative has the lower present worth? Method First Cost M&O Cost, per Year Salvage Value Life DDM $-200,000 $-40,000 $2,000 2 years The present worth for the DDM method is $2635271 The present worth for the LS method is $ The [(Click to select) method is selected LS $-500,000 $-40,000 $21,000 4 years
Buying Equipment 1 from XYZ company and company ABC will give the production similar productivity input of 400,000.00 per year. The equipment from company XYZ has a purchase price of 200,000.00, annual maintenance of 5,000.00, and production life of 10 years, while the equipment from company ABC has a purchase price of 100,000.00, annual maintenance of 2,000.00, and production life of 12. Using present worth method, what is the total present worth of each alternatives? Use MARR of 20%