A new production system for a factory is to be purchased and installed for $169,853. This...

A new production system for a factory is to be purchased and installed for $169,853. This system will save approximately 300,000 kWh of electric power each year for a 6-year period. Assume the cost of electricity is $0.10 per kWh, and factory MARR is 15% per year, and the salvage value of the system will be $8,297 at year 6. Using the AW method to analyzes if this investment is economically justified

A- calculate the AW of the above investment and insert the result below.

B- Based on the AW value you got in the previous question, is this investment economically justified or not? type you explanation below

Expert Solution

complete answer is given in picture. Give it a thumbs up Thank you

Rahul Sunny answered 1 year ago

A new production system for a factory is to be purchased and installed for $114,666. This...

A new production system for a factory is to be purchased and installed for $114,666. This system will save approximately 300,000 kWh of electric power each year for a 6-year period. Assume the cost of electricity is $0.10 per kWh, and factory MARR is 15% per year, and the salvage value of the system will be $8,666 at year 6. Using the AW method to analyzes if this investment is economically justified A. calculate the AW of the above investment...

A new production system for a factory is to be purchased and installed for $132,625. This...

A new production system for a factory is to be purchased and installed for $132,625. This system will save approximately 300,000 kWh of electric power each year for a 6-year period. Assume the cost of electricity is $0.10 per kWh, and factory MARR is 15% per year, and the salvage value of the system will be $8,351 at year 6. Using the AW method to analyzes if this investment is economically justified A- calculate the AW of the above investment...

A new production system for a factory is to be purchased and installed for $177,896. This...

A new production system for a factory is to be purchased and installed for $177,896. This system will save approximately 300,000 kWh of electric power each year for a 6-year period. Assume the cost of electricity is $0.10 per kWh, and factory MARR is 15% per year, and the salvage value of the system will be $9,551 at year 6. Using the AW method to analyzes if this investment is economically justified A- calculate the AW of the above investment...

Your company is considering the purchase of a new production system with an installed cost of...

Your company is considering the purchase of a new production system with an installed cost of $1,250,000. The cost will be depreciated on a straight-line basis to zero over the five-year life of the project, and the system can be sold at the end of the project for $225,000. It will provide additional revenue of $685,000 in the first year, and the additional revenue is expected to grow 5% per year thereafter. The associated cost of goods sold is estimated...

Sage is looking at a new system with an installed cost of $400,800. This cost will...

Sage is looking at a new system with an installed cost of $400,800. This cost will be depreciated straight-line to zero over the project's 4-year life, at the end of which the system can be scrapped for $60,200. The system will save the firm $180,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $38,500. All of the net working capital will be recovered at the end of the project. The...

You are the designer for a public address (PA) system to be installed for a new...

You are the designer for a public address (PA) system to be installed for a new hotel. The hotel shall have 15 storeys, 230 rooms, one recreational floor, one car park floor, two restaurants, and two banquet rooms. (a) One of the banquet rooms has dimensions 45 m (width) x 35 m (length) x 5.5 m (height). If ceiling-mounted loudspeakers of 110° coverage angle is to be installed, calculate the number of speakers required for the room. State clearly ALL...

Cori's Meats is looking at a new sausage system with an installed cost of $450,000. This...

Cori's Meats is looking at a new sausage system with an installed cost of $450,000. This cost will be depreciated straight-line to zero over the project’s five-year life, at the end of which the sausage system can be scrapped for $64,000. The sausage system will save the firm $240,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $23,000. If the tax rate is 21 percent and the discount rate is...

Cori's Meats is looking at a new sausage system with an installed cost of $520,000. This...

Cori's Meats is looking at a new sausage system with an installed cost of $520,000. This cost will be depreciated straight-line to zero over the project’s five-year life, at the end of which the sausage system can be scrapped for $78,000. The sausage system will save the firm $200,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $37,000. If the tax rate is 23 percent and the discount rate is...

Kolby’s Korndogs is looking at a new sausage system with an installed cost of $675,000. The...

Kolby’s Korndogs is looking at a new sausage system with an installed cost of $675,000. The asset qualifies for 100 percent bonus depreciation and can be scrapped for $89,000 at the end of the project’s 5-year life. The sausage system will save the firm $191,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $43,000. If the tax rate is 24 percent and the discount rate is 8 percent, what is...

Cori's Meats is looking at a new sausage system with an installed cost of $510,000. This...

Cori's Meats is looking at a new sausage system with an installed cost of $510,000. This cost will be depreciated straight-line to zero over the project’s five-year life, at the end of which the sausage system can be scrapped for $76,000. The sausage system will save the firm $190,000 per year in pretax operating costs, and the system requires an initial investment in net working capital of $35,000. If the tax rate is 21 percent and the discount rate is...

Question