Answer Happy

1. (50%) A piece of new equipment has been proposed by engineers to increase the productivity of a certain manual welding operation. The investment cost is $25,000 and the equipment will have a market value of $5,000 at the end of a study period of five years. Increased productivity attributable to the equipment will amount to $8,000 per year after extra operating costs have been subtracted from the revenue generated by the additional production. a. If the firm's MARR is 20% per year, is this proposal a sound one? Hint: Solve and compare your solution using PW, FW, AW, IRR, ERR b. Draw the cash-flow diagram. c. What is the payback period? Tabulate the payback period. 2. (25%) A cement grinding mill "A" with a capacity of 50 tons per hour utilizes forged steel grinding balls costing P 12,000 per ton, which have a wear rate of 100 grams per ton cement milled. Another cement mill "B" of the same capacity uses high chrome steel grinding balls costing P30,000 per ton with wear rate of 10 grams per ton cement milled. Determine by calculation the more economical grinding mill, considering other factors to be the same. 3. (25%) A cement kiln with production capacity of 130 tons per day (24 hrs.) of clinker has at its burning zone about 45 tons of magnesite chrome bricks being replaced periodically, depending on some operational factors and the life of the bricks. If locally produced bricks cost P25,000 per ton and have a life of 4 months, while certain imported bricks costing P30,000 per ton and have a life of 6 months, determine the more economical bricks and by how much?