kindly solve these problems
In our progressive example, B&T Enterprises is considering the replacement of a 2-year-old kiln with a new one to meet emerging market needs. When the current tunnel kiln was pur- chased 2 years ago for $25 million, an ESL study indicated that the minimum cost life was be- tween 3 and 5 years of the expected 8-year life. The analysis was not very conclusive because the total AW cost curve was flat for most years between 2 and 6, indicating insensitivity of the ESL to changing costs. Now, the same type of question arises for the proposed graphite hearth model that costs $38 million new: What are the ESL and the estimated total AW of costs? The Manager of Critical Equipment at B&T estimates that the market value after only 1 year will drop to $25 million and then retain 75% of the previous year's value over the 12-year expected life. Use this market value series and i = 15% per year to illustrate that an ESL analysis and marginal cost analysis result in exactly the same total AW of cost series.In planning a plant expansion, MedImmune has an economic decision to make-upgrade the existing controlled-environment rooms or purchase new ones. The presently owned ones were purchased 4 years ago for $250,000. They have a current "quick sale" value of $20,000, but for an investment of $100,000 now, they would be adequate for another 4 years, after which they would be sold for $40,000. Alternatively, new controlled-environment rooms could be purchased at a cost of $270,000. They are expected to have a 10-year life with a $50,000 sal- vage value at that time. Determine whether the company should upgrade or replace. Use a MARR of 20% per year. Three years ago, Will Gas Controls purchased equipment for $80,000 that was expected to have a useful life of 3 years with a $9000 salvage value. Increased demand necessitated an upgrade costing $30,000 one year ago. Technology changes now re- quire that the equipment be upgraded again for an- other $25,000 so that it can be used for 3 more years. Its annual operating cost will be $47,000, and it will have a $22,000 salvage after 3 years. Allema- tively, it can be replaced with new equipment that will cost $68 000 with operating costs of $35,000 per year and a salvage value of $21,000 after 3 years. If replaced now, the existing equipment will he sold for $9000. Calculate the annual worth of the defender at an interest rate of 10%% per yearAn industrial engineer at a fiber-optic manufacture ing company is considering two robots to reduce costs in a production line. Robot X will have a first cost of $82,000, an annus and opera- tion (M.&Oj cost of $30,000, and salvage values of $50,000, $42,000, and $35,000 after 1, 2, and years, respectively. Robot Y will have a first cost of $97,000, an annual M&( cost of $27,000, and salvage values of $60,000, $51,000, and $42,000 after 1, 2, and 3 years, respectively. Which robot should be selected if a 2-year study period is speci- fied at an interest rate of 15% per year and replace- ment after I ye an option? A 3-year-old machine purchased for $140,000 is not able to meet today's market demands. The machine can be upgraded wow for $70,000 or sold to a sub- contracting company for $40,000. The current ma- chine will have an annual operating cost of $85,000 per year and a $30,000 salvage value in 3 years. If upgraded, the presently owned machine will be re- taimed for only 3 more years, then replaced with a machine to be used in the man facture of several other product lines. Th which will serve the company now and for at least years, will cost $220,000. Its salvage value will be $50 000 for years I through 4: $20,000 after 5 years; and $10,000 thereafter. It will have an estimated op- erating cost of $65,000 per year. You want to per- form an economic analysis at 15%% per year using a 3-year planning horizon. a) Should the company replace the presently owned machine now, or do it 3 years from now? [bj Compare the capital recovery requirements for the replacement machine (challenger) over the study period and an expected life of 8 years.Use linear programming and a spreadsheet-based solution technique to select from the independent unequal-life projects in Problem 12.17. Solve the capital budgeting problem in Problem 12.20(a), using the linear programming model and a spreadsheet. Johnson and Johnson is expanding its first-aid products line for individuals allergic to latex. The research team comprised of doctors, engineers, and chemists has proposed the four projects esti- mated in Problem 12.18. Develop the linear programming model and use a spreadsheet to se- lect the projects to be funded. The MARK is 12% per year, and the budget limit is $16 million. All monetary values are in $1000 units Using the estimates in Problem 12.18 and repeated spreadsheet solution of the capital budgeting prob- lem for budget limits ranging from b = $5000 to b = $25,000, develop a spreadsheet chart that plots & versus the value of Z Danbrian M\f\f
