Question 1 In a new, highly automated factory, they expect labour costs to decrease at an annual compound rate of 5%; material costs are expected to increase at an annual compound rate of 6%, and energy costs are expected to increase at an annual compound rate of 3%. The labour, material and energy costs the first year are $3 million, $2 million, and $1,500,000 respectively. a. What will be the value of each cost during the fifth year? [5] b. Using an interest rate of 10% compounded annually, what uniform annual costs over a 5-year period would be equivalent to the cumulative labour, material, and energy costs? [10] Question 2 Operating and maintenance costs for year k are given as C = (el), k-2.3.....8. with C - $1500. Determine the equivalent uniform annual operating and maintenance cost based on quarterly compounding with a 10% nominal interest [10] Question 3 Horseback Company are considering two 100-horsepower motors (ie. output power). Motor O costs $5000 and operates at 90% efficiency. Motor R costs S3500 and is 88% efficient. They estimate annual operating and maintenance costs (not including power use) to be 15% of the initial purchase price, Power costs $0.20 per kWh. How many hours of full-load operation per annum are necessary to justify buying O instead of R? Use a 15-year planning horizon; assume that salvage values will equal 20 of the initial purchase prices and let the MARRhe 19% 746 kilowatts horsepower) 115 Question 1 In a new, highly automated factory, they expect labour costs to decrease at an annual compound rate of 5%; material costs are expected to increase at an annual compound rate of 6%, and energy costs are expected to increase at an annual compound rate of 3%. The labour, material and energy costs the first year are $3 million, $2 million, and $1,500,000 respectively. a. What will be the value of each cost during the fifth year? [5] b. Using an interest rate of 10% compounded annually, what uniform annual costs over a 5-year period would be equivalent to the cumulative labour, material, and energy costs? [10] Question 2 Operating and maintenance costs for year k are given as C = (el), k-2.3.....8. with C - $1500. Determine the equivalent uniform annual operating and maintenance cost based on quarterly compounding with a 10% nominal interest [10] Question 3 Horseback Company are considering two 100-horsepower motors (ie. output power). Motor O costs $5000 and operates at 90% efficiency. Motor R costs S3500 and is 88% efficient. They estimate annual operating and maintenance costs (not including power use) to be 15% of the initial purchase price, Power costs $0.20 per kWh. How many hours of full-load operation per annum are necessary to justify buying O instead of R? Use a 15-year planning horizon; assume that salvage values will equal 20 of the initial purchase prices and let the MARRhe 19% 746 kilowatts horsepower) 115