A manufacturing machine is to be replaced immediately because it no longer meets quality requirements for the end product The two best alternatives are a used piece of machine (M and a new automated model (M2) The economic estimates for each are shown below Alternative M1 M2 Capital investment 181,000 850,000 Annual expenses 170,000 120,000 Annual tax and insurance 3 3 Useful life (years) 5 20 Market value (at end of useful life) 10,000 17,000 The minimum attractive rate of return is 14 per year Which alternative is prepared based on repeatability assumption The bell company has two plants in the same region each having a capacity of 10 units of the same product per month Fixed costs of plant A are 55,000 per month and its variable cost are 1200M 4M 3 Fixed cost of plant B is 35,000 and its variable costs are 1100N 8N 2 M and N are the number of units produced at present sales has been established at 18 units per month with each plant producing 9 units Should the production volume be changed How should production be distributed By how much will the company save compared to present set up An oil company is planning to install a new system of pipes to connect storage tanks to a processing plant Two systems are being considered System X System Y Initial cost 380,000 280,000 Service life 10 years 10 years Salvage value 40,000 30,000 Annual maintenance 2,000 3,000 Pumps cost hour 10 00 14 00 For this analysis, the company will use an annual interest of 12 annual maintenance costs may be considered to be paid in the entireties at the end of the years in which their costs are incurred Should system Y be selected, how many hours per year should it be used Four alternatives to a small town been identified with the following benefits and costs Alternative Annual costs Annual benefits A 420,000 810,000 B 720,000 930,000 C 684,000 1,398,000 D 1,030,000 1,810,000 Select the best alternative using B C A man becomes temporarily disabled and is unable to pay 10134 due at the end of each quarter for 4 years on his 10 year contract His creditor agrees to allow him to make only the regular quarterly payment during the 5 th to 10 th years, plus a single payment at the end of ten years to discharge the accumulated liability from the first four years If money is worth 16 compounded quarterly, find the single payment

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 23, 2024

A manufacturing machine is to be replaced immediately because it no longer meets quality requirements for the end product. The two best alternatives are a

A manufacturing machine is to be replaced immediately because it no longer meets quality requirements for the end product. The two best alternatives are a used piece of machine (M and a new automated model (M2). The economic estimates for each are shown below.

Alternative

M1 M2

Capital investment 181,000 850,000

Annual expenses 170,000 120,000

Annual tax and insurance 3% 3%

Useful life (years) 5 20

Market value (at end of useful life) 10,000 17,000

The minimum attractive rate of return is 14% per year. Which alternative is prepared based on repeatability assumption?

The bell company has two plants in the same region each having a capacity of 10 units of the same product per month. Fixed costs of plant A are 55,000 per month and its variable cost are 1200M-4M³. Fixed cost of plant B is 35,000 and its variable costs are 1100N-8N². M and N are the number of units produced at present sales has been established at 18 units per month with each plant producing 9 units. Should the production volume be changed? How should production be distributed? By how much will the company save compared to present set-up?

An oil company is planning to install a new system of pipes to connect storage tanks to a processing plant. Two systems are being considered.

System X System Y

Initial cost 380,000 280,000

Service life 10 years 10 years

Salvage value 40,000 30,000

Annual maintenance 2,000 3,000

Pumps cost/hour 10.00 14.00

For this analysis, the company will use an annual interest of 12% annual maintenance costs may be considered to be paid in the entireties at the end of the years in which their costs are incurred. Should system Y be selected, how many hours per year should it be used?

Four alternatives to a small town been identified with the following benefits and costs.

Alternative	Annual costs	Annual benefits
A	420,000	810,000
B	720,000	930,000
C	684,000	1,398,000
D	1,030,000	1,810,000

Select the best alternative using B/C

A man becomes temporarily disabled and is unable to pay 10134 due at the end of each quarter for 4 years on his 10 year contract. His creditor agrees to allow him to make only the regular quarterly payment during the 5^th to 10^th years, plus a single payment at the end of ten years to discharge the accumulated liability from the first four years. If money is worth 16% compounded quarterly, find the single payment.