Question
In: Economics
A company needs a modern material handling system for facilitating access to and from a busy...
A company needs a modern material handling system for facilitating access to and from a busy warehouse. If the company’s management use a MARR (given in the below table for each group) in their economic decisions.The company found two systems, the first system is a second-hand and the second system is a new system. The economic consequences of both systems are given in the below table for each group. PART 2: Considering the two mutually exclusive alternatives and assume permanent need for the system (repeatability assumption).
a) Determine the unfavorable system’s investment cost at which the company would be indifferent between alternatives. (For example, if when you analyze the problem, you pick the new system, determine the investment cost of the second-hand system that makes it on same level of economic desirability).
MARR = 21.6% per year
Second hand system
Investment cost = $192,500
Annual expenses = $51,800
Annual saving = $104,500
Useful life = 8 years
Salvage value = $68,000
NEW system
investment cost = $312,500
annual expenses = $52,300
first year savings = $127,000 decreasing by $1,000 each year thereafter
useful life = 16 years
salvage value = $99,000
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Rahul Sunny answered 2 years agoRelated Solutions
A company needs a modern material handling system for facilitating access to and from a busy...
A company needs a modern material handling system for
facilitating access to and from a busy warehouse. If the company’s
management use a MARR in their economic decisions.
The company found two systems, the first system is a second-hand
and the second system is a new system.
The economic consequences of both systems are given in the below
table.
Answer the following questions:
MARR= 22.5% per year
For Second-Hand system:
Investment Cost= $146,600
Annual expenses=$17,300
Annual savings= $61,000
Useful Life...
A company needs a modern material handling system for facilitating access to and from a busy...
A company needs a modern material handling system for
facilitating access to and from a busy warehouse. If the company’s
management use a MARR (given in the below table) in their economic
decisions.The company found two systems, the first system is a
second-hand and the second system is a new system. The economic
consequences of both systems are given in the below table for each
group. PART1: For the second-hand system alternative:
a).Calculate the simple and discounted payback periods.
b).What...
A company needs a modern material handling system for facilitating access to and from a busy...
A company needs a modern material handling system for
facilitating access to and from a busy warehouse. If the company’s
managementuse a MARR (given in the below table) in their economic
decisions.
The company found two systems, the first system is a second-hand
and the second system is a new system. The economic consequences of
both systems are given in the below table.
MRR=17.1% per year
For Second-Hand system:
Investment Cost= 164500$
Annual expenses=46700$
Annual savings= 82600$
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