Question
In: Economics
For the below ME alternatives , which machine should be selected based on the PW analysis....
For the below ME alternatives , which machine should be selected based on the PW analysis. MARR=10%.
| Machine A | Machine B | Machine C | |
| First cost, $ | 15000 | 30000 | 11,265 |
| Annual cost, $/year | 14,021 | 6,000 | 4,000 |
| Salvage value, $ | 4,000 | 5,000 | 1,000 |
| Life, years | 3 | 6 | 2 |
Answer the below questions :
C- PW for machine C =
Solutions
Expert Solution
The present worth of total outflows for Machine C is the least ($ 17,379) of the three machines @ MARR of 10%, therefore machine C should be selected:
| Year | PW factor @ MARR= 10% | Machine A | PW @ MARR | Machine B | PW @ MARR | Machine C | PW @ MARR |
| 0 | 1 | -15000 | -15000 | -30000 | -30000 | -11265 | -11265 |
| 1 | 0.909 | -14021 | -12745 | -6000 | -5454 | -4000 | -3636 |
| 2 | 0.826 | -14021 | -11581 | -6000 | -4956 | -3000 | -2478 |
| 3 | 0.751 | 10021 | 7526 | -6000 | -4506 | ||
| 4 | 0.683 | -6000 | -4098 | ||||
| 5 | 0.621 | -6000 | -3726 | ||||
| 6 | 0.564 | -1000 | -564 | ||||
| Total PW(A) | -31801 | Total PW (B) | -53304 | Total PW(C) | -17379 |
(Note that the outflows in terminal years for each machines is reduced by scarp sale inflows).
Rahul Sunny answered 2 years agoRelated Solutions
For the below ME alternatives , which machine should be selected based on the PW analysis....
For the below ME alternatives , which machine should be selected
based on the PW analysis. MARR=10%
Machine A
Machine B
Machine C
First cost, $
22,421
30000
10000
Annual cost, $/year
8,497
6,000
4,000
Salvage value, $
4,000
5,000
1,000
Life, years
3
6
2
Answer the below questions :
A- PW for machine A=
For the below ME alternatives , which machine should be selected based on the PW analysis....
For the below ME alternatives , which machine should be selected
based on the PW analysis. MARR=10%
Machine A
Machine B
Machine C
First cost, $
15000
21,476
10000
Annual cost, $/year
8,095
6,000
4,000
Salvage value, $
4,000
5,000
1,000
Life, years
3
6
2
Answer the below questions :
B- PW for machine B=
For the below ME alternatives , which machine should be selected based on the PW analysis....
For the below ME alternatives , which machine should be selected
based on the PW analysis. MARR=10%
Machine A
Machine B
Machine C
First cost, $
23,979
30000
10000
Annual cost, $/year
8,679
6,000
4,000
Salvage value, $
4,000
5,000
1,000
Life, years
3
6
2
Answer the below questions :
A- PW for machine A=
For the below ME alternatives , which machine should be selected based on the PW analysis. MARR=10%.
For the below ME alternatives , which machine should be selected based on the PW analysis. MARR=10%.Machine AMachine BMachine CFirst cost, $ 15000 30000 10,423Annual cost, $/year 12,340 6,000 4,000Salvage value, $ 4,000 5,000 1,000Life, years 362Answer the below questions :A- PW for machine C =B- Based on the PW value you got in the previous questions, which machine we should select? type you explanation below
For the below ME alternatives , which machine should be selected based on the AW analysis....
For the below ME alternatives , which machine should be selected
based on the AW analysis. MARR=10%.
Machine A
Machine B
Machine C
First cost, $
15000
30000
11,937
Annual cost, $/year
13,944
6,000
4,000
Salvage value, $
4,000
5,000
1,000
Life, years
3
6
2
Answer the below questions :
C- AW for machine C =
For the below ME alternatives , which machine should be selected based on the AW analysis....
For the below ME alternatives , which machine should be selected
based on the AW analysis. MARR=10%
Machine A
Machine B
Machine C
First cost, $
15,567
30000
10000
Annual cost, $/year
9,535
6,000
4,000
Salvage value, $
4,000
5,000
1,000
Life, years
3
6
2
Answer the below questions :
A- AW for machine A=
For the below ME alternatives , which machine should be selected based on the AW analysis....
For the below ME alternatives , which machine should be selected
based on the AW analysis. MARR=10%.
Machine A
Machine B
Machine C
First cost, $
15000
30000
11,564
Annual cost, $/year
10,709
6,000
4,000
Salvage value, $
4,000
5,000
1,000
Life, years
3
6
2
Answer the below questions :
C- AW for machine C =
QUESTION 3 For the below ME alternatives , which machine should be selected based on the...
QUESTION 3
For the below ME alternatives , which machine should be selected
based on the PW analysis.
Machine A
Machine B
Machine C
First cost, $
21,929
30000
10000
Annual cost, $/year
8,702
6,000
4,000
Salvage value, $
4,000
5,000
1,000
Life, years
3
6
2
Answer the below questions :
A- PW for machine A=
---------------------------------------------------------------------------------------------
QUESTION 4
For the below ME alternatives , which machine should be selected
based on the PW analysis.
Machine A
Machine B...
Perform a present worth (PW)-based evaluation of the two alternatives below using a spreadsheet. The after-tax...
Perform a present worth (PW)-based evaluation of the two
alternatives below using a spreadsheet. The after-tax minimum
acceptable rate of return (MARR) is 8% per year, Modified
Accelerated Cost Recovery System (MACRS) depreciation applies, and
Te = 40%. The (GI - OE) estimate is made for
the first 3 years; it is zero in year 4 when each asset is
sold.
Alternative
X
Y
First Cost, $
–8,000
–13,000
Salvage Value, Year 4, $
0
2,000
GI-OE, $ per Year...
Perform a present worth (PW)-based evaluation of the two alternatives below using a spreadsheet. The after-tax...
Perform a present worth (PW)-based evaluation of the two
alternatives below using a spreadsheet. The after-tax minimum
acceptable rate of return (MARR) is 8% per year, Modified
Accelerated Cost Recovery System (MACRS) depreciation applies, and
Te = 40%. The (GI - OE) estimate is made for
the first 3 years; it is zero in year 4 when each asset is
sold.
Alternative
X
Y
First Cost, $
–8,000
–13,000
Salvage Value, Year 4, $
0
2,000
GI-OE, $ per Year...
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