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Please complete the highlighted problems (4, 27, 34, 47, 73). You MUST use the Present Worth Analysis Method for all problems to work out all
Please complete the highlighted problems (4, 27, 34, 47, 73). You MUST use the Present Worth Analysis Method for all problems to work out all the problems. Thank you
IBP Inc. is considering establishing a new machine to automate a meatpacking process. The machine will save $55,000 in labor 5-4 annually. The machine can be purchased for $225,000 today and will A be used for 10 years. It has a salvage value of $12,500 at the end of its useful life. The new machine will require an annual maintenance cost of $11,000. The corporation has a minimum rate of return of 9%. Do you recommend automating the process?If produced by Method A, a product's initial capital cost will be $100,000, its annual operating cost will be $20,000, and its salvage value after 3 years will be $20,000. With Method B there is a first 5-27 cost of $150,000, an annual operating cost of $10,000, and a $50,000 salvage value after its 3-year life. Based on a present worth analysis at a 15% interest rate, which method should be used?Javier is an IE at Lobos Manufacturing. He has been studying process line G to determine if an automated system would be preferred to the existing labor-intensive system. If Lobos wants to earn at least 20% and uses a 15-year planning horizon, which alternative is preferred? Contributed by Paul R. McCright, University of South Florida 367 Labor Intensive Automated 5-34 Initial cost $0 $110,000 Installation cost 0 18,500 First-year O&M 2,000 4,800 Annual increase 450 950 First-year labor costs 72,000 47,500 Annual increase 5% 5% Salvage value (EOY15) 2,500 20,000Dr. Fog E. Professor is retiring and wants to endow a chair of 5-47 engineering economics at his university. It is expected that he will need to cover an annual cost of $250,000 forever. What lump sum must he donate to the university today if the endowment will earn 5% interest?Given the following data, use present worth analysis to find the best alternative, A, B, or C. A B C Initial cost $10,000 15,000 $12,000 5-73 Annual benefit 6,000 10,000 5,000 Salvage value 1,000 -2,000 3,000 Useful life 2 years 3 years 4 years Use an analysis period of 12 years and 15% interestStep by Step Solution
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