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I need your help solving these problems. Pls help me by answering and showing explanation. Question 5 (15 points): Crush Cola Company must purchase a
I need your help solving these problems. Pls help me by answering and showing explanation.
Question 5 (15 points): Crush Cola Company must purchase a bottlecapping machine. The following is known about the machine and about possible cash ows. 9 =30 1; =50 p =.20 First cost $40,000 $40,000 $40,000 Annual savings 2,000 3,500 5,000 Annual costs 7,000 5,000 4,000 Salvage value 4,000 5,000 6,500 The machine is expected to have a useful life of 10 years. Crush Cola Company has a MARR of 6%. Determine the net present worth (NPW) of the machine. Question 6 (20 points): A new heat exchanger must be installed by C81, Inc. Alternative A has an initial cost of $33,400, and alternative B has an initial cost of $47,500. Both alternative are expected to last 10 for years. The annual cost of operating the heat exchanger depends on ambient temperature in the plant and on energy costs. The estimate of the annual operating costs and probabilities for each alternative are given. If CSI, Inc has a MARR of 8% and uses [RR analysis for all capital decisions, which exchanger should be purchased? (Hint: incremental analysis is needed) Annual Operating Cost Probability. p $4500 .10 Alternative A 7000 .60 8000 .25 9250 .05 Annual Operating Cost Probability, p $4000 .20 Alternative B 5275 .60 6450 . 1 5 8500 .05Step by Step Solution
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