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, $ | 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=
Solutions
Expert Solution
Machine A:
First Cost = 22,421
Annual Cost = 8,497
Salvage Value = 4,000
Life = 3
| Year | Annual Cost | Present worth of annual cost | Rough work to calculate present worth |
| 1 | 8,497 | 7,724.55 | [8,497 / 1.1^1] |
| 2 | 8,497 | 7,022.31 | [8,497 / 1.1^2] |
| 3 | 8,497 | 6,383.92 | [8,497 / 1.1^3] |
| 21,130.78 |
Present worth of salvage at the end of 3 years = [4,000 / 1.1^3] = 3,005.26
Present worth of machine A = - First cost - Present worth of annual maintenance cost + Present worth of salvage value = - 22,421 - 21,130.78 + 3,005.26 = - 40,546.52
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, $
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 =
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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