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- If a garden center is considering the purchase of a new tractor with an initial investment cost of $120,000, and the center expects a return of $30,000 in year one, $20,000 in years two and three. $15,000 In years four and five, and $10,000 in year six and beyond, what is the payback period?Given a project with the following characteristics, answer the following questions: You are the project manager of a project to plant trees on the sidewalks of the local community. Your project is scheduled to last for 6 months. You are to plant (thirty) 30 trees each month. Each tree is planned to cost R1 000. It is now the last day of month 3. You have planted 80 trees and your CPI is 1.11. 1. What is the actual cost of the project right now? 2. What is the current schedule performance index (SPI) of the project? 3. How is the project currently performing in terms of budget and schedule? Motivate your answer. 4. What is the percentage of the project that is currently complete. What should be reported?In a bio-based material recycling company, the operation managers are considering a twin-screw extruder with a price of 12,000 OMR and another 2,000 OMR will be spent for shipping and installation of the extruder. The estimated net income generated from this machine is 3,500 OMR per year. The extruder will be used for 5 years, and then it will be sold for an estimated market value of 2,500 OMR. The extruder MARCS property class is 5 years. If the effective income tax rate (t) is 40% and the after-tax MARR is 10%. (a) What is the after-tax IRR for this project? (use trial and error procedure and GDS) (b) Should this extruder be purchased by the company?
- A Facility Manager is evaluating the installation of Inverter type airconditoning in his facilities (to replace his current non inverter type). The cost of the inverter air conditoning system is P 90,000. Current electricity bill is averaging P 40,000 per month and the Facility Manager estimates that he will save 10% of this cost if he proceeds with the project. He thinks the new acu unit will be good for 5 years. Calculate the a. Average Payback Period b. NPV at a discount rate of 10% c. IRR d. BCR Should the FM proceed with the project?Use the following for the next 2 questions: A facility is to be built with construction costs of $50 per square foot amortized over 20 years. Receiving and put-away costs are expected to be $0.02 per box and pick-pack-ship costs are expected to be $0.10 per box. The facility will have an annual upkeep and maintenance cost of $5 per square foot. 1. If the company constructs a 100,000 square foot facility, what is the monthly fixed cost? - $102.500 - $62,500 - $92,500 - $112,500 - $82,500 - $52,500 - $72,500 2. If demand in April is 30,000 boxes, what is the variable cost in April? (assume the number of boxes received in April equals the number of boxes shipped in April) - $3,000 - $1,200 - $3,600 - $2,400 - $600 - $4,200For your new laboratory, you plan to purchase energy efficient freezers. There are two models in the market: Model X costs $100,000, and you need two units of model X for your project. Maintaining costs would be $50,000 and decreasing by $10,000 for each unit per year. Each freezer can be used for four years. At the end of which time, you estimate that the salvage value will be $70,000 for both freezers. Model Y costs $250,000 each. The maintaining cost of this model would be $10,000 per year and it would be decreasing by $5,000 starting in year 4. The salvage value of both model Y at the end of seven years is $60,000. Once again, two units of model Y is required for your project. Since you must complete your project in two years, you estimated that, the model X could be sold for $50,000 each and the model Y for $125,000 each after two years. Find the present worth difference between two models using MARR=10%. Question 3 options: a) Between $35,640 and $37,800…
- For your new laboratory, you plan to purchase energy efficient freezers. There are two models in the market: Model X costs $100,000, and you need two units of model X for your project. Maintaining costs would be $50,000 and decreasing by $10,000 for each unit per year. Each freezer can be used for four years. At the end of which time, you estimate that the salvage value will be $70,000 for both freezers. Model Y costs $250,000 each. The maintaining cost of this model would be $10,000 per year and it would be decreasing by $5,000 starting in year 4. The salvage value of both model Y at the end of seven years is $60,000. Once again, two units of model Y is required for your project. Since you must complete your project in two years, you estimated that, the model X could be sold for $50,000 each and the model Y for $125,000 each after two years. Find the present worth difference between two models using MARR=10%. a) Between $52,640 and $54,800 O b) Between $35,640 and $37,800 c) Between…A construction firm is considering establishing an engineering computing center. The center will be equipped with three engineering workstations that cost $45,000 each, and each has a service life of five years. The expected salvage value of each workstation is $2,000. The annual operating and maintenance cost would be $25,000 for each workstation. At a MARR of 15%, determine the equivalent annual cost for operating the engineering center. Click the icon to view the interest factors for discrete compounding when MARR= 15% per year. C The equivalent annual cost is $thousand. (Round to the nearest whole number.) More Info Worth Single Payment Compound Present Amount Factor (F/P, i, N) 1.1500 Compound Amount Factor (F/A, i, N) Factor (P/F, i, N) 0.8896 1.0000 1.3225 0.7561 2.1500 1.5209 0.6575 3.4725 0.5718 4.9934 1.7490 2.0114 0.4972 6.7424 0.4323 8.7537 0.3759 11.0688 2.3131 2.6800 3.0590 3.5179 0.3269 13.7268 0.2843 16.7858 4.0456 0.2472 20.3037 SAWNIN 2 3 4 5 67899 10 Equal Payment…A new manufacturing facility will produce two products, each of which requires a drilling operation during processing. Two alternative types of drilling machines (D1 and D2) are being considered for purchase. One of these machines must be selected. For the same annual demand, the annual production requirements (machine hours) and the annual operating expenses (per machine) are listed in the shown Table. Which machine should be selected if the MARR is 15% per year? Show all your work to support your recommendation. Assumptions: The facility will operate 2,000 hours per year. Machine availability is 80% for Machine D1 and 75% for Machine D2. The yield of D1 is 90%, and the yield of D2 is 80%. Annual operating expenses are based on an assumed operation of 2,000 hours per year, and workers are paid during any idle time of Machine D1 or Machine D2. State any other assumptions needed to solve the problem.
- A new biomaterial used for prosthetic devices was developed by engineers in the laboratory that requires production equipment to start manufacturing. Two different equipment are considered. Equipment A will have an initial cost of $125,000 and annual cost of $55,000. Equipment B will have an initial cost of $175,000 and an annual cost of $35,000. For 20% MARR which process should be selected. What is the incremental rate of return?The firm is considering two machines: Machine A with initial investment of $10,000 and annual maintenance cost of $1,000. The life of the machine A is 4 years. Machine B with initial investment of $20,000 and annual maintenance cost of $800. The life of the machine B is 6 years. If the required rate of return is 10%, calculate the equivalent annual cost (EAC) of each machine and which machine company must choose? (A) The EAC of Machine A is $4,154.71 and Machine B is $5,392.15. The Company must choose Machine B. (B) The EAC of Machine A is $4,154.71 and Machine B is $5,392.15. The Company must choose Machine A. (C) The EAC of Machine A is $3,169.87 and Machine B is $3,484.21. The Company must choose Machine B. (D) The EAC of Machine A is $3,169.87 and Machine B is $3,484.21. The Company must choose Machine A.The firm is considering two machines: Machine A with initial investment of $10,000 and annual maintenance cost of $1.000. The life of the machine A is 4 years. Machine B with initial investment of $20,000 and annual maintenance cost of $800. The life of the machine B is 6 years. If the required rate of return is 10%, calculate the equivalent annual cost (EAC) of each machine and which machine company must choose? (A) The EAC of Machine A is $4,154.71 and Machine B is $5,392.15. The Company must choose Machine B. (B) The EAC of Machine A is $4,154.71 and Machine B is $5,392.15. The Company must choose Machine A. (C) The EAC of Machine A is $3,169.87 and Machine B is $3,484.21. The Company must choose Machine B. (D) The EAC of Machine A is $3,169.87 and Machine B is $3,484.21. The Company must choose Machine A. Answer A D.