Two ventilation systems suppliers, Supplier A will have an initial cost of 1600000$, and its operating...

Two ventilation systems suppliers, Supplier A will have an initial cost of 1600000$, and its operating cost is 70000 $ per year, where its life is 4 year with salvage value of 400000 $. Supplier B has an initial cost of 2100000 $ and operating cost of 50000 $ at the ﬁrst year with an increase of $3000 per year thereafter, and its useful life is 8 years with no salvage value.

Use the future worth analysis to determine which system should be selected, the interest rate is 12% per year?

Expert Solution

Here we are required to do the future worth analysis in case of future worth analysis the useful life of the two alternatives must be equal.

Take LCM of their useful life 4 and 8 we get 8 years. Calculating the FW of supplier A

We can determine the value of the factors using the factor table.

Now calculating the future worth of supplier B

Om the basis of FW analysis the supplier B has a lower cost. Select B.

Please contact if having any query will be obliged to you for your generous support. Your help mean a lot to me, please help. Thank you.

Rahul Sunny answered 1 year ago

Two ventilation systems suppliers, Supplier A will have an initial cost of 1600000$, and its operating...

Two ventilation systems suppliers, Supplier A will have an initial cost of 1600000$, and its operating cost is 70000 $ per year, where its life is 4 year with salvage value of 400000 $. Supplier B has an initial cost of 2100000 $ and operating cost of 50000 $ at the ﬁrst year with an increase of $3000 per year thereafter, and its useful life is 8 years with no salvage value. Use the future worth analysis to determine which...

You have two suppliers for electrical components. The first supplier has sent you 57 parts, of...

You have two suppliers for electrical components. The first supplier has sent you 57 parts, of which 5 have failed. The second supplier has sent you 64 parts, of which 8 have failed. Test the proportion of failures to see if the suppliers are equal in failure rate. Don’t use a significance level, instead report a p-value and give an interpretation of that result.

The number of days required for two suppliers to deliver orders is as follows. Supplier A:...

The number of days required for two suppliers to deliver orders is as follows. Supplier A: 10.0 4.0 13.0 1.0 17.0 7.0 11.0 16.0 6.0 19.0 Supplier B: 9.0 4.0 13.0 2.0 23.0 8.0 12.0 15.0 6.0 24.0 (A) Which supplier provides more consistent and homogenous delivery times A or B? ... Average Number of Days for Supplier A = days, and Standard Deviation = day. Coefficient of Variation for Supplier A = Average Number of Days for Supplier B = days, and...

The number of days required for two suppliers to deliver orders is as follows. Supplier A:...

The number of days required for two suppliers to deliver orders is as follows. Supplier A: 10.0 4.0 13.0 1.0 17.0 7.0 11.0 16.0 6.0 19.0 Supplier B: 9.0 4.0 13.0 2.0 23.0 8.0 12.0 15.0 6.0 24.0 (A) Which supplier provides more consistent and homogenous delivery times A or B? ... Average Number of Days for Supplier A = days, and Standard Deviation = day. Coefficient of Variation for Supplier A = Average Number of Days for Supplier B = days, and...

2. If produced by Method A, a product’s initial capital cost will be $100,000, its operating...

2. If produced by Method A, a product’s initial capital cost will be $100,000, its operating cost will be $20,000 per year, and its salvage value after 3 years will be $20,000. With Method B there is a first cost of $150,000, an operating cost of $10,000 per year, and a $50,0000 salvage value after its 3-year life. Based on a present worth analysis at a 15% interest rate, which method should be used?

2. If produced by Method A, a product’s initial capital cost will be $100,000, its operating...

2. If produced by Method A, a product’s initial capital cost will be $100,000, its operating cost will be $20,000 per year, and its salvage value after 3 years will be $20,000. With Method B there is a first cost of $150,000, an operating cost of $10,000 per year, and a $50,0000 salvage value after its 3-year life. Based on a present worth analysis at a 15% interest rate, which method should be used?

A construction contractor needs to choose between two suppliers of dump trucks. Supplier 1 has an...

A construction contractor needs to choose between two suppliers of dump trucks. Supplier 1 has an initial cost of $125,000 and annual operating cost of $25, 000 per year. Supplier 2 has initial cost $160,000 and has annual operating cost of 20,000 per year. The truck fleet has the same 10-year life forecast Based on incremental rate of return (IROR) and a MARR of 8%, and which supplier of trucks should the contractor choose? Please do not use excel.

Plastech Inc. is operating its business in Oman for many years. They are manufacturers and suppliers...

Plastech Inc. is operating its business in Oman for many years. They are manufacturers and suppliers of different plastic articles. They are now planning to open up a web store through which, people will be able to order online and receive their goods. This online business will however require initial investment for developing the system and hiring new staff for receiving orders and delivery. This initial investment is estimated to be OMR 160,000. Information on the expected additional revenues and...

A manufacturer receives parts from two suppliers. An SRS of 400 parts from supplier 1 finds...

A manufacturer receives parts from two suppliers. An SRS of 400 parts from supplier 1 finds 20 defective; an SRS of 100 parts from supplier 2 finds 10 defective. Let p1 and p2 be the proportion of all parts from suppliers 1 and 2, respectively, that are defective. Is there evidence of a difference in the proportion of defective parts produced by the two suppliers? To make this determination, you test the hypotheses H0 : p1 = p2 and Ha...

Virus Stopper Inc., a supplier of computer safeguard systems, uses a cost of capital of 8...

Virus Stopper Inc., a supplier of computer safeguard systems, uses a cost of capital of 8 percent to evaluate average-risk projects, and it adds or subtracts 1 percentage points to evaluate projects of more or less risk. Currently, two mutually exclusive projects are under consideration. Both have a cost of $ 303 and will last 4 years. Project A, a riskier-than-average project, will produce annual end of year cash flows of $ 101 . Project B, of less than average...

Question

Two ventilation systems suppliers, Supplier A will have an initial cost of 1600000$, and its operating...

Solutions

Expert Solution

Related Solutions

Two ventilation systems suppliers, Supplier A will have an initial cost of 1600000$, and its operating...

You have two suppliers for electrical components. The first supplier has sent you 57 parts, of...

The number of days required for two suppliers to deliver orders is as follows. Supplier A:...

The number of days required for two suppliers to deliver orders is as follows. Supplier A:...

2. If produced by Method A, a product’s initial capital cost will be $100,000, its operating...

2. If produced by Method A, a product’s initial capital cost will be $100,000, its operating...

A construction contractor needs to choose between two suppliers of dump trucks. Supplier 1 has an...

Plastech Inc. is operating its business in Oman for many years. They are manufacturers and suppliers...

A manufacturer receives parts from two suppliers. An SRS of 400 parts from supplier 1 finds...

Virus Stopper Inc., a supplier of computer safeguard systems, uses a cost of capital of 8...