Answer Happy

Problem 2 (15 points) Your new factory is going gangbusters! You have so many trucks bringing materials in and product out that you need a new driveway. It will cost $200,000 to construct. Annual maintenance will start at $3000 per year increasing by $200 each year. In addition, it will need a major overhaul every 10 years costing $40,000. We expect the factory to be useful for the next 30 years. Your MARR is 12%. Find the Annual Worth of the total expense for this driveway over 30 years. If I were you, I wouldn't pay for a major overhaul in the last year!
Problem 6 (20 points) The machine of the previous problem is expected to produce revenues of $38,000 each year for five years. We will sell the machine for $20,000 at the end of year 5. Using these revenue projections and the depreciation found in Problem 5, find the ATCF and Taxes for each of years 1 through 5. Find the Annual Worth after taxes for this machine.
bave neithe Economics Se -92 Problem 1 (10 points) I am planning to buy a large machine for my company which I can rent out to others for revenues. I have four candidate machines with the following expected costs and revenues. My pretax MARR is 18%. I need a Present Worth analysis ranking of these alternatives. 1 2 3 4 10 10 10 10 Candidate: Expected Life (years) Cost ($) Salvage (S) Annual Revenue ($) Annual Expenses ($) 320,000 430,000 245,000 295,000 40,000 78,000 35,000 110,000 215,000 330,000 145,000 175,000 75,000 150,000 41,500 70,000
uthor Problem 4 (20 points) Zzzz's R Us makes sleep products. Their current building is five years old and has an HVAC system of the same age. The unit cost $12,000 initially and has annual operating costs which began at $1200 and increased by $200 each year since so that last year it was $2000. The current book value of the system is $7,000 but its resale value is $4000 at present. It will have a salvage value of $0 in 10 more years. The company is planning an expansion to make new lines which will require a new wing and additional HVAC. There are two choices for the HVAC. Option 1 - Keep the current system and buy a new system for the new wing only. The new system would cost $9,000 and have a service life of 15 years with no salvage value at that time. The operating costs will start at $1,000 the first year and increase by $50 per year. In 10 years it will have a market value of $1,600. Option 2 - Replace the current system with a unit that will handle the entire building with the new wing. This unit will cost $19,000 and have operating costs of $1700 the first year, increasing by $100 each year. It has an expected life of 15 years with no salvage value, but after 10 years it will have a market value of $4000 MARR is 20% and Zzzz has a 10 year planning horizon. a. Make a cash flow diagram for each alternative. b. Using a Present Worth analysis, decide which alternative is more favorable.