Concurris Prototyping is committed to using the newest and finest equipment in its labs. Accordingly, Wilma, a senior engineer, has recommended that a 2-year-old piece of precision measurement equipment be replaced immediately. She believes it can be demonstrated that the proposed equipment is economically advantageous at a 15% -per year return and a planning horizon of 5 years. Perform the replacement analysis using the annual worth method, a 5-year study period, and the estimates below. Was Wilma correct? Equipment Original purchase price, S Current market value, $ Remaining life, years Proposed -42,000 Estimated value in 5 years, $ Salvage value after 15 years, S AOC. $ per year The AW of the defender is $- Wilma (Click to select) correct Current -30,000 15,000 5 7,000 -13,000 T 15 10,000 5,000 -3,000 and the AW of the challenger is $-

Concurris Prototyping is committed to using the newest and finest equipment in its labs. Accordingly, Wilma, a senior engineer, has recommended that a 2-year-old piece of precision measurement equipment be replaced immediately. She believes it can be demonstrated that the proposed equipment is economically advantageous at a 15% -per year return and a planning horizon of 5 years. Perform the replacement analysis using the annual worth method, a 5-year study period, and the estimates below. Was Wilma correct? Equipment Original purchase price, S Current market value, $ Remaining life, years Proposed -42,000 Estimated value in 5 years, $ Salvage value after 15 years, S AOC. $ per year The AW of the defender is $- Wilma (Click to select) correct Current -30,000 15,000 5 7,000 -13,000 T 15 10,000 5,000 -3,000 and the AW of the challenger is $-

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

(2) If the initial investment on the equipment is 25000 and it will have a salvage value of 5000 at the end of 5 years. It will save 8000 per year for the study period. Is it worthwhile to install the equipment? Justify it by using Future Worth (FW) formulation when MARR is 20%
An environmental engineer is considering three methods for disposing of a non-hazardous chemical sludge: land application, fluidized-bed incineration, and private disposal contract. The estimates for each method are below. Determine the equivalent present worth value of the LAND APPLICATION using its AW value based on 10% per year. Refer to table 2 for additional information. Table 2 Land Application Inciner- ation Contract Firg cost, S -150.000 -a00 000 Annual cost, Syear -95.000 -60,000 -170,000 Salvage value, S Life, years 25.000 300,000 4. 6. O $1,158,329 O $-1,158,329 O $933,027 O $-933,027 O No correct answer
The first cost of an electric rebar bender is P355,000 and a salvage value of P50,000 at the end of its life for 5 years. Money is worth 4.3% annually. If there is no salvage value and the annual maintenance cost is P19,000, find the annual cost of perpetual service
A remotely located air sampling station can be powered by solar cells or by running an electric line to the site and using conventional power. Solar cells will cost $7000 to install and will have a useful life of 4 years with no salvage value. Annual costs for inspection, cleaning, etc. are expected to be $1600. A new power line will cost $14000 to install, with power costs expected to be $1300 per year. Since the air sampling project will end in 4 years, the salvage value of the line is considered to be zero. At an interest rate of 8.00% per year, which alternative should be selected on the basis of a future worth analysis? (Include a minus sign if necessary.) The future worth of solar cells is $[ and that of electric line is $ (Click to select) :) should be selected on the basis of a future worth analysis.
oncurris Prototyping is committed to using the newest and finest equipment in its labs. Accordingly, Wilma, a senior engineer, has recommended that a 2 -year-old piece of precision measurement equipment be replaced immediately. She believes it can be demonstrated that the proposed equipment is economically advantageous at a 15%-per year return and a planning horizon of 5 years. Perform the replacement analysis using the annual worth method, a 5 -year study period, and the estimates below. Was Wilma correct? \table[[Equipment,Current,Proposed],[Original purchase price, $,-30,000,-42,000
You must evaluate the alternatives below to increase plant capacity for manufacturing high-pressure hydraulic hoses. Find the present worth of each alternative at an interest rate of 14% per year, assuming a life of 5 years for both alternatives. Which alternative should be selected and what is its present worth (select the closest value)? Alternative First Cost Maintenance cost, per Year Salvage Value X Y $25,000 $75,000 $8,000 $7,000 $2,500 $8,500 Option X with a PW --$51.170 O Option Y with a PW --$94,620 Option Y with a PW = $55,380 Option X with a PW --$1,170
Machines that have the following costs are under consideration for a robotized welding process. Use an interest rate of 10% per year and PW analysis to determine which machine should be selected. Machine X Machine Y First cost, $ −250,000 −430,000 AOC, $ per year −60,000 −40,000 Salvage value, $ 70,000 95,000 Life, years 3 6
. A West Virginia coal mining operation has installed an in-shaft monitoring system foroxygen tank and gear readiness for emergencies. Based on maintenance patterns for previoussystems, costs are minimal for the first few years, increase for a time period, and then level off.Maintenance costs are expected to be $150,000 in year 3, $175,000 in year 4, and amountsincreasing by $25,000 per year through year 6 and remain constant thereafter for the expected10-year life of this system. If similar systems will replace the current one, determine theperpetual equivalent annual maintenance cost at i = (2+x) % per year.
Concurris Prototyping is committed to using the newest and finest equipment in its labs. Accordingly, Wilma, a senior engineer, has recommended that a 2-year-old piece of precision measurement equipment be replaced immediately. She believes it can be demonstrated that the proposed equipment is economically advantageous at a 15% per year return and a planning horizon of 5 years Perform the replacement analysis using the annual worth method. a 5-year study period, and the estimates below. Was Wilma correct? Equipment Proposed 42,000 Original purchase price. S Current market value, S Remaining life, years stimated value in 5 years, S Salvage value after 15 years. S AOCES per year The AW of the defender a $- Wilma Click to select correct Current -30,000 15.000 5 2000 -13.000 15 30.000 5.000 -3,000 and the AW of the challenger is $-
Concurris Prototyping is committed to using the newest and finest equipment in its labs. Accordingly, Wilma, a senior engineer, has recommended that a 2-year-old piece of precision measurement equipment be replaced immediately. She believes it can be demonstrated that the proposed equipment is economically advantageous at a 15%-per year return and a planning horizon of 5 years. Perform the replacement analysis using the annual worth method, a 5-year study period, and the estimates below. Was Wilma correct? Equipment Current Proposed Original purchase price, $ −30,000 −36,000 Current market value, $ 15,000 -- Remaining life, years 5 15 Estimated value in 5 years, $ 7,000 10,000 Salvage value after 15 years, $ -- 5,000 AOC, $ per year −7,000 −3,000 The AW of the defender is $− and the AW of the challenger is $− . Wilma (Click to select) is is not correct.
Concurris Prototyping is committed to using the newest and finest equipment in its labs. Accordingly, Wilma, a senior engineer, has recommended that a 2-year-old piece of precision measurement equipment be replaced immediately. She believes it can be demonstrated that the proposed equipment is economically advantageous at a 15%-per year return and a planning horizon of 5 years. Perform the replacement analysis using the annual worth method, a 5-year study period, and the estimates below. Was Wilma correct Equipment Current Proposed Original purchase price, $ Current market value, $ -30,000 -42,000 15,000 Remaining life, years 5 15 Estimated value in 5 years, $ 7,000 10,000 5,000 -3,000 Salvage value after 15 years, $ AOC, $ per year The AW of the defender is $- Wilma (Click to select) correct. -14,000 and the AW of the challenger is $-
Concurris Prototyping is committed to using the newest and finest equipment in its labs. Accordingly, Wilma, a senior engineer, has recommended that a 2-year-old piece of precision measurement equipment be replaced immediately. She believes it can be demonstrated that the proposed equipment is economically advantageous at a 15%-per year return and a planning horizon of 5 years. Perform the replacement analysis using the annual worth method, a 5-year study period, and the estimates below. Was Wilma correct? Equipment Original purchase price, $ Current market value, $ Remaining life, years Estimated value in 5 years, $ Salvage value after 15 years, $ AOC, $ per year Current -30,000 15,000 5 7,000 -11,000 The AW of the defender is $- challenger is $- Wilma ((Click to select)) correct. Proposed -40,000 -- 15 10,000 5,000 -3,000 and the AW of the