Question
In: Economics
A piece of new equipment has been propose by engineers to increase the productivity of certain...
A piece of new equipment has been propose by engineers to increase the productivity of certain manual welding operation. The investment cost is $22,953 and the equipment will have a market value of $5,012 at the end of a study period of five years. increased productivity attributable to the equipment will amount to $9,267 per year after extra operating cost have been subtracted from the revenue generated by the additional production. If the firm's MARR is 20% per year, What is the present worth (PW) for this proposal?
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
TA, Inc. is considering replacing a piece of old equipment with a piece of new equipment....
TA, Inc. is considering replacing a piece of old equipment with
a piece of new equipment. Details for both are given below:
Old Equipment
New Equipment
Current book value
$1,500,000
Current market value
$2,500,000
Acquisition cost
$6,200,000
Remaining life
10 years
Life
10 years
Annual sales
$350,000
Annual sales
$850,000
Cash operating expenses
$140,000
Cash operating expenses
$500,000
Annual depreciation
$150,000
Annual depreciation
$620,000
Accounting salvage value
$0
Accounting salvage value
$0
Expected salvage value after 10 years
$240,000
Expected...
TA, Inc. is considering replacing a piece of old equipment with a piece of new equipment....
TA, Inc. is considering replacing a piece of old equipment with
a piece of new equipment. Details for both are given below:
Old Equipment
New Equipment
Current book value
$1,800,000
Current market value
$2,500,000
Acquisition cost
$6,200,000
Remaining life
10 years
Life
10 years
Annual sales
$350,000
Annual sales
$850,000
Cash operating expenses
$140,000
Cash operating expenses
$500,000
Annual depreciation
$180,000
Annual depreciation
$620,000
Accounting salvage value
$0
Accounting salvage value
$0
Expected salvage value
$240,000
Expected salvage value
$750,000...
DT is evaluating an alternative for a new piece of equipment. They estimate the new equipment...
DT is evaluating an alternative for a new piece of equipment.
They estimate the new equipment will cost $164,000, last 4 years,
and have a maintenance and operation cost of $55,000 per year with
no salvage value. Using a MARR of 22% per year, what is the present
worth?
DataPoint Engineering is considering the purchase of a new piece of equipment for $310,000. It has...
DataPoint Engineering is considering the purchase of a new piece
of equipment for $310,000. It has an eight-year midpoint of its
asset depreciation range (ADR). It will require an additional
initial investment of $130,000 in nondepreciable working capital.
$52,000 of this investment will be recovered after the sixth year
and will provide additional cash flow for that year. Income before
depreciation and taxes for the next six are shown in the following
table. Use Table 12–11, Table 12–12. Use Appendix...
DataPoint Engineering is considering the purchase of a new piece of equipment for $310,000. It has...
DataPoint Engineering is considering the purchase of a new piece
of equipment for $310,000. It has an eight-year midpoint of its
asset depreciation range (ADR). It will require an additional
initial investment of $130,000 in nondepreciable working capital.
$52,000 of this investment will be recovered after the sixth year
and will provide additional cash flow for that year. Income before
depreciation and taxes for the next six are shown in the following
table. Use Table 12–11, Table 12–12. Use Appendix...
DataPoint Engineering is considering the purchase of a new piece of equipment for $290,000. It has...
DataPoint Engineering
is considering the purchase of a new piece of equipment for
$290,000. It has an eight-year midpoint of its asset depreciation
range (ADR). It will require an additional initial investment of
$190,000 in nondepreciable working capital. $47,000 of this
investment will be recovered after the sixth year and will provide
additional cash flow for that year. Income before depreciation and
taxes for the next six are shown in the following table. Use Table
12–11, Table 12–12. Use Appendix...
DataPoint Engineering is considering the purchase of a new piece of equipment for $310,000. It has...
DataPoint Engineering is considering the purchase of a new piece
of equipment for $310,000. It has an eight-year midpoint of its
asset depreciation range (ADR). It will require an additional
initial investment of $130,000 in nondepreciable working capital.
$52,000 of this investment will be recovered after the sixth year
and will provide additional cash flow for that year. Income before
depreciation and taxes for the next six are shown in the following
table. Use Table 12–11, Table 12–12. Use Appendix...
DataPoint Engineering is considering the purchase of a new piece of equipment for $330,000. It has...
DataPoint Engineering is considering the purchase of a new piece
of equipment for $330,000. It has an eight-year midpoint of its
asset depreciation range (ADR). It will require an additional
initial investment of $150,000 in nondepreciable working capital.
Fifty-seven thousand dollars of this investment will be recovered
after the sixth year and will provide additional cash flow for that
year. Income before depreciation and taxes for the next six are
shown in the following table. Use Table 12–11, Table 12–12....
DataPoint Engineering is considering the purchase of a new piece of equipment for $260,000. It has...
DataPoint Engineering is considering the purchase of a new piece
of equipment for $260,000. It has an eight-year midpoint of its
asset depreciation range (ADR). It will require an additional
initial investment of $160,000 in nondepreciable working capital.
$40,000 of this investment will be recovered after the sixth year
and will provide additional cash flow for that year. Income before
depreciation and taxes for the next six are shown in the following
table. Use Table 12–11, Table 12–12. Use Appendix...
DataPoint Engineering is considering the purchase of a new piece of equipment for $310,000. It has...
DataPoint Engineering is considering the purchase of a new piece
of equipment for $310,000. It has an eight-year midpoint of its
asset depreciation range (ADR). It will require an additional
initial investment of $130,000 in nondepreciable working capital.
$52,000 of this investment will be recovered after the sixth year
and will provide additional cash flow for that year. Income before
depreciation and taxes for the next six are shown in the following
table. Use Table 12–11, Table 12–12. Use Appendix...
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