05-FE001 WP Consider a palletizer at a bottling plant that has a first cost of $150,000, operating and maintenance costs of $17,500 per year, and an esti- mated net salvage value of $25,000 at the end of 30 years. Assume an interest rate of 8%. What is the annual equivalent cost of the investment if the plan- ning horizon is 30 years? a. $29,760 b. $30,600 c. $31,980 d. $35,13005-FE001 WP Consider a palletizer at a bottling plant that has a first cost of $150,000, operating and maintenance costs of $17,500 per year, and an esti- mated net salvage value of $25,000 at the end of 30 years. Assume an interest rate of 8%. What is the annual equivalent cost of the investment if the plan- ning horizon is 30 years? a. $29,760 b. $30,600 c. $31,980 d. $35,13005-FE004 m The overhead costs in a highly automated factory are expected to increase at an annual compound rate of 10% for the next 7 years. The overhead cost at the end of the rst year is $200,000. What is the annual worth of the overhead costs for the 7-year period? The time value of money rate is 8%/year. Oa. $263,250 Ob. $231,520 Oc. $200,000 Od. $187,020 05-FE007 m On the day your daughter is born, you deposit $1,000 in a college savings account that earns 8% compounded annually. On each of her birthdays thereafter, up to and including her 18th birthday, you deposit an additional $1,000. How much money is in the college account the day after her 18th birthday? a. $37,450 b. $38,950 c. $41,450 (1. $46,800 05.01-PR001 WP Carlisle Company has been cited and must invest in equipment to reduce stack emissions or face EPA fines of $18,500 per year. An emission reduction filter will cost $75,000 and have an expected life of 5 years. Carlisle's MARR is 10%/year. a. What is the annual worth of this investment? b. What is the decision rule for judging the attractiveness of investments based on annual worth? c. Is the filter economically justified?05.01-PR001 WP Carlisle Company has been cited and must invest in equipment to reduce stack emissions or face EPA fines of $18,500 per year. An emission reduction filter will cost $75,000 and have an expected life of 5 years. Carlisle's MARR is 10%/year. a. What is the annual worth of this investment? b. What is the decision rule for judging the attractiveness of investments based on annual worth? c. Is the filter economically justified?05.01-PR011 WP Mayberry, Inc., is considering a design change that will cost $6,000 and will result in an annual savings of $1,000 per year for the 6- year life of the project. A cost of $2,000 will be avoided at the end of the project as a result of the change. MARR is 8%/year. a. What is the annual worth of this investment? b. What is the decision rule for judging the attractiveness of investments based on annual worth? c. Should Mayberry implement the design change?05.01-PR011 WP Mayberry, Inc., is considering a design change that will cost $6,000 and will result in an annual savings of $1,000 per year for the 6- year life of the project. A cost of $2,000 will be avoided at the end of the project as a result of the change. MARR is 8%/year. a. What is the annual worth of this investment? b. What is the decision rule for judging the attractiveness of investments based on annual worth? c. Should Mayberry implement the design change?05.01-PR015 WP Final Finishing is considering three mutually exclusive alternatives for a new pol- isher. Each alternative has an expected life of 10 years and no salvage value. Polisher 1 requires an initial investment of $20,000 and provides annual benefits of $4,465. Polisher 2 requires an initial investment of $10,000 and provides annual benefits of $1,770. Polisher 3 requires an initial investment of $15,000 and provides annual benefits of $3,580. MARR is 15%/year. a. What is the annual worth of each polisher? b. Which polisher should be recommended?05.01-PR015 WP Final Finishing is considering three mutually exclusive alternatives for a new pol- isher. Each alternative has an expected life of 10 years and no salvage value. Polisher 1 requires an initial investment of $20,000 and provides annual benefits of $4,465. Polisher 2 requires an initial investment of $10,000 and provides annual benefits of $1,770. Polisher 3 requires an initial investment of $15,000 and provides annual benefits of $3,580. MARR is 15%/year. a. What is the annual worth of each polisher? b. Which polisher should be recommended?05.02-PR005 WP You decide to open an individu ual retirement account (IRA ) at your local bank that pays 8%/ year. At the end of each of the next 40 years, you will deposit $2,000 per year into the account (40 total deposits). Three years after the last deposit, you will begin making annual with- drawals. If you want the account to last 30 years (30 withdrawals), what amount will you be able to withdraw each year?05.02-PR005 WP You decide to open an individu ual retirement account (IRA ) at your local bank that pays 8%/ year. At the end of each of the next 40 years, you will deposit $2,000 per year into the account (40 total deposits). Three years after the last deposit, you will begin making annual with- drawals. If you want the account to last 30 years (30 withdrawals), what amount will you be able to withdraw each year?05.02-PR019 WP Parker County Community Col- lege (PCCC) is trying to determine whether to use no insulation or to use insulation that is either 1 inch thick or 2 inches thick on its steam pipes. The heat loss from the pipes without insulation is expected to cost $1.50 per year per foot of pipe. A 1-inch thick insulated covering will eliminate 89% of the loss and will cost $0.40 per foot. A 2-inch thick insulated covering will eliminate 92% of the loss and will cost $0.85 per foot. PCCC Physical Plant Services estimates that there are 250,000 feet of steam pipe on campus. The PCCC Accounting Office requires a 10%/year return to justify capital expenditures. The insulation has a life expectancy of 10 years. Determine which insulation (if any) should be purchased using a ranking future worth analysis.05.02-PR019 WP Parker County Community Col- lege (PCCC) is trying to determine whether to use no insulation or to use insulation that is either 1 inch thick or 2 inches thick on its steam pipes. The heat loss from the pipes without insulation is expected to cost $1.50 per year per foot of pipe. A 1-inch thick insulated covering will eliminate 89% of the loss and will cost $0.40 per foot. A 2-inch thick insulated covering will eliminate 92% of the loss and will cost $0.85 per foot. PCCC Physical Plant Services estimates that there are 250,000 feet of steam pipe on campus. The PCCC Accounting Office requires a 10%/year return to justify capital expenditures. The insulation has a life expectancy of 10 years. Determine which insulation (if any) should be purchased using a ranking future worth analysis.05.02-PR001 An investment has the following cash ow prole. MARR is 12%/year. What is the minimum value of X such that the investment is attractive based on a future worth measure of merit? End of Year Cash Flow -. 05.01-PR005 WP Galvanized Products is consid ering the purchase of a new computer system for its enterprise data management system. The vendor has quoted a purchase price of $100,000. Galva- nized Products is planning to borrow one-fourth of the purchase price from a bank at 15% compounded annually. The loan is to be repaid using equal annual payments over a 3-year period. The com- puter system is expected to last 5 years and has a salvage value of $5,000 at that time. Over the 5- year period, Galvanized Products expects to pay a technician $25,000 per year to maintain the system but will save $55,000 per year through increased efficiencies. Galvanized Products uses a MARR of 18%/ year to evaluate investments. a. What is the annual worth of this investment? b. What is the decision rule for judging the attractiveness of investments based on annual worth? c. Should the new computer system be purchased?05.01-PR005 WP Galvanized Products is consid ering the purchase of a new computer system for its enterprise data management system. The vendor has quoted a purchase price of $100,000. Galva- nized Products is planning to borrow one-fourth of the purchase price from a bank at 15% compounded annually. The loan is to be repaid using equal annual payments over a 3-year period. The com- puter system is expected to last 5 years and has a salvage value of $5,000 at that time. Over the 5- year period, Galvanized Products expects to pay a technician $25,000 per year to maintain the system but will save $55,000 per year through increased efficiencies. Galvanized Products uses a MARR of 18%/ year to evaluate investments. a. What is the annual worth of this investment? b. What is the decision rule for judging the attractiveness of investments based on annual worth? c. Should the new computer system be purchased?Ch05-FE-like problems 05-FE001 show your work 05-FE004 Use 6% for the interest rate. Show your work 05-FE007 Hint: don't forget the deposit in year zero and year 18. Show your work. Ch05-Problems 05.01-PRO01 05.01-PR005 I suggest you do a detailed cashflow diagram or a excel sheet 05.01-PR011 05.01-PR015 05.02-PRO01 You MUST use Future Worth to solve this problem 05.02-PR005 05.02-PR019 Be sure to use FW analysis