vompany need to decide .a initial cost -225000000 annual operations cost -30000000 maintenance cost 50000000 estimated...

vompany need to decide .a
initial cost -225000000
annual operations cost -30000000
maintenance cost 50000000
estimated life in years -infinite
and b option

inital ckst - 350000000
annual depreciation cost 6000000
maintenance cost
per every 20 ysars 30000000 .estimated life - infinite

marr is 7%

which option you would recommend

Expert Solution

jeff jeffy answered 1 year ago

A certain piece ofequipment has an initial cost of $10,000 with an annual maintenance cost of...

A certain piece ofequipment has an initial cost of $10,000 with an annual maintenance cost of $500 per year with no salvage value at the end of its useful life of 4 years. There is an alternative equipment that costs $20,000 with no maintenance cost the first year. However, it has a maintenance cost of $100 the second year and increases $100 per year in subsequent years. Its salvage value is $5,000 and has a useful life of 12 years. The MARR...

Alternative A has an initial acquisition cost of $10,000 and an annual average operating and maintenance...

Alternative A has an initial acquisition cost of $10,000 and an annual average operating and maintenance cost of $1402 per down time. Alternative B has a higher acquisition cost of $20,000, but has a lower annual average operating and maintenance cost of $500 per down time. With an expected lifetime of 5 years for both alternatives, and an annual interest of 5%, determine the break even number of down times per year. please show all work

The annual maintenance and operating (M&O) cost was estimated to be $2,500 in Year 1 through...

The annual maintenance and operating (M&O) cost was estimated to be $2,500 in Year 1 through Year 4, and $4,400 in Year 5 through Year 9. Estimate the future value of the M&O cost (at t=9) with an interest rate of 11% per year.

Your company just purchased a piece of equipment. The maintenance cost of the equipment is estimated...

Your company just purchased a piece of equipment. The maintenance cost of the equipment is estimated at $1,200 for the first year and it is to rise by $200 each year. How much should be set aside now to have enough to cover for the maintenance cost for the next 7 years? Assume payments are made at the end of each year and an interest rate of 4%.

Consider a machine that has an initial cost of $126,000 and an estimated salvage value of...

Consider a machine that has an initial cost of $126,000 and an estimated salvage value of $27,000. After some analysis we conclude that this machine will have O&M costs of $1,850 per year but based on the faulty nature of this machine we will have to incur in major maintenance costs at the end of year 3 and 6. During year 3 we expect to pay $14,000 and for year we estimate a $16,500. The machine will have a useful...

What is the difference between the operations controls: maintenance control, cost control, and ratio analysis. ?

A grader has an initial cost of $220,000 and an estimated useful life of 10 years....

A grader has an initial cost of $220,000 and an estimated useful life of 10 years. The salvage value after 10 years of use is estimated to be $25,000. What is the annual depreciation amount in the fourth year if the sum-of-the-years method of depreciation accounting is used? Select one: a. $19,500.00 b. $24,818.18 c. $28,363.64 d. $99,454.55

A loader has an initial cost of $154,000 and an estimated useful life of 8 years....

A loader has an initial cost of $154,000 and an estimated useful life of 8 years. The salvage value after 8 years of use is estimated to be $10,000. a. What is the annual depreciation amount if the straight-line method of depreciation accounting is used? b. What is the book value after 6 years if the straight-line method of depreciation accounting is used? c. What is the annual depreciation amount in the fifth year if the sum-of-the-years method of depreciation...

If a solar panel system has an increasing annual maintenance cost (an arithmetic gradient) of $500...

If a solar panel system has an increasing annual maintenance cost (an arithmetic gradient) of $500 per year over an 8 year period, then what is the present value based on 10% interest? If a solar panel system has an increasing annual maintenance cost (an arithmetic gradient) of $500 per year over an 8 year period THAT STARTS AT YEAR 4, then what is the present value based on 10% interest? To be clear: the total period is 12 years...

Your company purchases a new heavy-duty truck. It has an initial cost of $50,000 and maintenance...

Your company purchases a new heavy-duty truck. It has an initial cost of $50,000 and maintenance will be provided by the dealer at no additional charge for the first 3 years. At the end of year 4 maintenance cost is estimated to be $2,000 increasing at 10 percent per year thereafter for an additional 4 years. You estimate the additional revenues to the company due to the use of the new heavy-duty truck to be $8,000 end of years 1...

Question