Question
In: Economics
An irrigation canal contractor wants to determine whether he should purchase a used Caterpillar mini excavator...
An irrigation canal contractor wants to determine whether he should purchase a used Caterpillar mini excavator or a Toro powered rotary tiller for servicing irrigation ditches in an agricultural area of California. The initial cost of the excavator is $26,500 with a $9000 salvage value after 10 years. Fixed costs for insurance, license, etc. are expected to be $18,000 per year. The excavator will require one operator at $15 per hour and maintenance at $1 per hour. In 1 hour, 0.15 mile of ditch can be prepared. Alternatively, the contractor can purchase a tiller and hire 2 workers at $11 per hour each. The tiller costs $1200 and has a useful life of 5 years with no salvage value. Its operating cost is expected to be $1.20 per hour, and with the tiller, the two workers can prepare 0.04 mile of ditch in 1 hour. The contractor’s MARR is 10% per year. Determine the number of miles of ditch per year the contractor would have to service for the two options to break even. Solve the problem using Annual worth (AW), present worth (PW), anf future worth (FW).
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
Veritas Inc. has decided to acquire a new Hydraulic Excavator. It has three options. Caterpillar: purchase...
Veritas Inc. has decided to acquire a new Hydraulic Excavator.
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John Deere: purchase cost of $285,068 and operating costs of
$20,274 per year (paid at the end of each year). Volvo: purchase
cost of $307,686 and operating costs of $15,767 per year (paid at
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Veritas Inc. has decided to acquire a new Hydraulic Excavator. It has three options. Caterpillar: purchase...
Veritas Inc. has decided to acquire a new Hydraulic Excavator.
It has three options.
Caterpillar: purchase cost of $356609 and operating costs of
$20439 per year (paid at the end of each year).
John Deere: purchase cost of $280828 and operating costs of
$24980 per year (paid at the end of each year).
Volvo: purchase cost of $311464 and operating costs of $18932
per year (paid at the end of each year).
Assume that Geek Inc. has a budget of...
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•
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Calculate the NPV for the following project. The company wants to determine whether it should expand...
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A warehouse is trying to determine whether they should purchase
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Research Hypothesis:
Null Hypothesis:
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A contractor plans to purchase a pickup. Select the correct equation and factor to determine if...
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Select one:
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Suppose a company wants to decide whether to lease or purchase an asset. Purchase: The capital...
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