The county engineer is considering the purchase of a concrete transit mix truck, and asks you to calculate the equivalent cost per cubic yard of concrete for owning and operating the tran- sit mix truck. Use i =0.75 percent per month. cost new = $200,000 resale value at EOM 120 $20,000 O & M costs (including concrete mix materials) = $30,000/month O & M gradient = $100/month/month periodic major overhaul every 8 months (last at EOM 120) = $15,000/cach periodic overhaul cost gradient = $1,000/each/8 months 1,000 yd'/month monthly production of concrete =

The county engineer is considering the purchase of a concrete transit mix truck, and asks you to calculate the equivalent cost per cubic yard of concrete for owning and operating the tran- sit mix truck. Use i =0.75 percent per month. cost new = $200,000 resale value at EOM 120 $20,000 O & M costs (including concrete mix materials) = $30,000/month O & M gradient = $100/month/month periodic major overhaul every 8 months (last at EOM 120) = $15,000/cach periodic overhaul cost gradient = $1,000/each/8 months 1,000 yd'/month monthly production of concrete =

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Similar questions

Outdoor Structures, Inc. is considering two projects, A and B. Each project requires an investment of $1,000. Using the payback period as the method for analyzing each project, which project should Outdoor Structures choose? Year A B 1 $100 $500 2 200 400 3 300 300 400 100 500 600 4 5 6 - --
Two pumps are being considered to replace an old one. The details of the two pumps are shown below. If the MARR is 15%, which pump do you recommend buying if the repeatability assumption applies? Pump A Investment (RO) Pump B 2,200 3,000 Annual Maintenance 210 315 (RO/year) Power consumption (RO/year) Salvage Value (RO) Life time (year) 1,100 1,200 350 150 6.
In order to carry a new investment project, company A has to purchase a machine for OMR 400,000. Company A staff have enough capacity to carry out the production, no one new will need to be hired, they are currently paid OMR 20,000. Calculate the relevant cost? a. OMR 20,000 Ob. OMR 380,000 O c. OMR 400,000 d. OMR 420,000
A warehouse manager is evaluating 2 different robotic systems to be installed in his warehouse. Using the present worth analysis, determine which is the economically better system if MARR is 12% per year compounded monthly. Justify your answer. System A System B - 40,000 -60,000 - 5,000 Initial cost, RM Maintenance cost, RM per month Semi-annual maintenance cost, RM per 6-month Salvage value after 5 years, RM - 13,000 8,000 10,000
3. As 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. MARR is at 15% per year. You can use the assumption of repeatability in this case. Alternative B A Capital investment $272.000 $346.000 Annual expenses Useful life (years) | Salvage value 28.800 19,300 6. 25,000 40.000 Show that the same selection is made for the following methods: b. AWC method
I need help filling out the empty fields. Can you please include the formulas: Laurman, Incorporated is considering the following project: Required investment in equipment $2,205,000 Project life 7 Salvage value 225,000 The project would provide net operating income each year as follows: Sales $2,750,000 Variable expenses 1,600,000 Contribution margin $1,150,000 Fixed expenses: Salaries, rent and other fixed out-of pocket costs $520,000 Depreciation 350,000 Total fixed expenses 870,000 Net operating income $280,000 Company discount rate 18% Required: (Use cells A4 to C18 from the given information, as well as B24, and A30 to D46 to complete this question. Negative amounts or amounts to be deducted should be input as negative values and will display in…
A small town is considering two potential alternatives for a garbage collection system. The following cost data has been compiled. If the interest rate is 7%, Using the conventional B/C ratio, what is the ratio and which alternative should be chosen? Salvage value is considered an offset to the original cost. System A System B Year O, first cost 350,000 250,000 Annual savings 32,000 22,000 Salvage value 50,000 40,000 LIfe 30 30
Two types of power converters are under consideration for a specific application. An economic comparison is to be made using a MARR of 10% and the following cost estimates: Alternative Model A Model B Service Life (Years) 5 10 First Cost $10,000 $20,000 Salvage Value 0 5,000 Annual Operating Cost 2,500 1,200 Draw the Cash Fiow Diagram for each alfernative covering the entire analysis period. Compute the Net Present Worth for Model A? Compute the Net Equivalent Uniform Annual Worth for Model A? Which of these alternatives should be selected?
Morton and Moore LLC (M²) is trying to decide between two machines that are necessary in its manufacturing facility. If M² has a MARR of 10%, which of the following machines should be chosen? Hint: Minimize EUAC. Machine A Machine B 6- 28 620 First cost $45,000 $24,000 Annual operating costs 31,000 35,000 Overhaul in Years 2 and 4 6,000 Overhaul in Year 5 12,000 Salvage value 10,000 8,000 Useful life 8 years 6 years 1 Ne Ac Ca Ca EM Ye Co Pr Ri Vi Ge Lit Ra Ne An Pr Sa Sc Be
ality is working on following two mutually exclusive proposals for increasing and optimizing the traffic lighting. Find the best option by using the Benefit/Cost ratio analysis given that the MARR 10%. Project-I Project-II Initial cost ($) 900,000 1,700,000 Annual operating cost ($/ per year) 120,000 60.000 Annual benefit ($ / per year) 730,000 650,000 Annual disbenefit ($ / per year) 300,000 195,000 Life (years) 10 25
A university is trying to determine how much it should charge for tickets to basketball games to help offset the expenses of the new arena. The cost to build the arena including labor, materials. e tc. was $92 million. Each year the maintenance cost is expected to increase by 5% as the building gets older. 1l1e maintenance cost for the first year is $150.000. Utilities arc expected to average about $200.000 per year and labor costs $300,000. The average attendance at basketball games over the year is expected to be 100,000 people (or 100,000 tickets sold to events). Assuming the arena has no other source of income besides regular ticket sales (not including student tickets) for basketball games, what should the university charge so that it can recover at least a 6% cost of borrowing on its investment? The university expects the arena to be used for 40 years and 10 have no appreciable salvage value
Consider the relative costs of a timber pedestrian bridge and a steel one; their initial capital costs, annual OMR costs and useful lives are given below: Initial capital cost Annual OMR cost Life span Timber Bridge $500,000 $30,000 15 years Steel Bridge $700,000 $5000 30 years Find the alternative of the least overall costs (use i = 8%). Use both present worth and annual worth methods.

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