Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A delivery car had a first cost of $26,000, an annual operating cost of $13,000, and an estimated $4000 salvage value after its 6year life.

image text in transcribedimage text in transcribedimage text in transcribed
A delivery car had a first cost of $26,000, an annual operating cost of $13,000, and an estimated $4000 salvage value after its 6year life. Due to an economic slowdown, the car will be retained for only 3 years and must be sold now as a used vehicle. At an interest rate of 13% per year, what must the market value of the used vehicle be in order for its AW value to be the same as the AW if it had been kept for its full life cycle? The market value of the used vehicle is determined to be $ |:|. White Oaks Properties builds strip shopping centers and small malls. The company plans to replace its refrigeration, cooking, and HVAC equipment with newer models in one entire center built 9 years ago. 9 years ago, the original purchase price ofthe equipment was $675,000 and the operating cost has averaged $245,000 per year. Determine the equivalent annual cost of the equipment ifthe company can now sell it for $194,000, The company's MARR is 23% per year. The equivalent annual cost of the equipment is determined to be $ . Required information The Briggs and Stratton Commercial Division designs and manufacturers small engines for golf turf maintenance equipment. A robotics-based testing system with support equipment will ensure that their new signature guarantee program entitled "Always Insta-Start" does indeed work for every engine produced. Pull System Push System First cost of $-1,500,000 $-2,250,000 equipment AOC per Year $-700,000 $-600,000 Salvage Value $100,000 $50,000 Estimated Life 8 years 8 years Compare the annual worth of the two systems at MARR = 10% per year. Select the better system. The (Click to select) | is determined to be the better system

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting What the Numbers Mean

Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele,

9th Edition

978-0-07-76261, 0-07-762611-7, 9780078025297, 978-0073527062

More Books

Students also viewed these Accounting questions

Question

What do the terms financial leverage and financial risk mean?

Answered: 1 week ago

Question

Describe the process of writing a social venture plan.

Answered: 1 week ago

Question

]. What happened during the meeting of the ethics task force?

Answered: 1 week ago