Answer all the questions.
PROBLEM 1 A construction company is considering the replacement analysis of a pump. The old pump has annual operating and maintenance costs of 50.000 TL/yr. It can be kept for 5 years more. The old pump can be sold to the manufacturer of the new pump for 25.000 TL. The new pump will have a purchase price of 120.000 TL, it will have a value of 50.000 TL in five years time; and it will have annual operating and maintenance costs of 20.000 TL/yr. Using a MARR of 20%, evaluate the investment alternative comparing the present worths in the Receipts and Disbursements Method.PROBLEM 11 A machine is purchased 4 years ago with a service life of 10 years. The current book value of the existing machine is 80.000 TL. The company is considering replacement of the machine with a new one which will be purchased for 100.000 TL with an 8 years of service life. Annual expenses of the existing machine is 15.000 TL and it requires a repair cost of 25.000 TL at 2 years time from now on, it has no salvage value at the end of its service life. Annual expenses of the new machine is 30.000 TL and it has a salvage value of 20.000 TL at the end of its service life. Determine if the machine should be replaced or not by using Annual Equivalent values and Comparative Use Value Method (MARR = 10%).PRQBLEM 13 An existing machine which worth 35.000 TL today can be used for another 4 years ifit is maintained every year. Operation and maintenance cost is estimated to be 15.01! TL per year. {in the other hand, a new machine, which can do the same service, can be purchased for 45.000 "IL with a useful life of years and its operation and maintenance cost is estimated to be 14.030 "IL per year. If the company expects to have 1296 MARK per year from its investments, decide whether the existing machine is to replaced with the new machine or not. No salvage value is to he considered for either machine. Use Comparative Use 1value hIethod with Annual Equivalent values . PROBLEM 2 The ABC company has a tower crane that has an estimated remaining life of 10 years. The crane can be sold for 60.000 TL. If the crane is kept in service it must have a major repair immediately at a cost of 30.000 TL. Operating and maintenance costs will be 20.000 TL/yr after the crane is repaired. After being repaired, the crane will have a zero salvage value at the end of the 10 year period. A new crane will cost 160.000 TL, will last for 10 years, and will have 30.000TL salvage value at that time. Operating and maintenance costs are 10.000 TL/yr for the new crane. The company uses a MARR of 10% in evaluating investment alternatives. Should the company buy the new crane? Compare the annual equivalents in the "Outsider Viewpoint" method.PROBLEM 15 A company has purchased an excavator for 9.000 TL. 4 years ago. It has been estimated that the remaining useful life of the existing equipment is 6 years (total useful life is 10 years) and it will earn a salvage value of 1.000 TL at the end of its useful life. The book value of the existing equipment today is 5.000 TL and the operating costs from now are estimated to be 300 TL at the end of the first year and increasing by 50 TL per year from then on. The company decides to replace the excavator by a new one which will cost 10 000 $ with a useful life of 9 years and a salvage value of 2.500 TL. The operating costs of the new excavator are: 100 TL for the first 3 years, 150 TL for the second 3 years and 200 TL for the last 3 years. If MARR is 12%, should the company replace the existing excavator? Use Annual Equivalent Values and solve by using Comparative Use Value Method.PROBLEM 16 Rephrased, units and numbers converted from RS to TL from (http:/ptel.ac.in/courses/105103023/33) A construction company has purchased a construction machine 2 years ago at a cost of 200.000 TL. At the time of the purchase, the estimated life was 12 years, and salvage value was 40.000 TL. The annual operating and maintenance cost was 6.600 TL/yr. The construction company is now considering to replace this existing equipment with a new model. As a result of a market search, they identified that the current book value (price of a brand new equipment of the same brand) of the existing equipment is 180.000 TL, and the current market value of the existing machine is 140.000 TL. Based on this information, they revised the remaining life as 8 years, and the salvage value at 8" year as 29.000 TL. The initial cost of the new model is 155.000 TL. The estimated life, salvage value, and annual operating and maintenance cost are 8 years, 40.000 TL, and 5.500 TL/yr respectively. Company's MARR is 10% per year. Find out whether the construction company should retain the ownership of the existing machine or replace it with the new model. Use "Outsider View point" Method with Annual Equivalent Approach
