Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Question Value: 25 A pallette conveyor system used to transport pallettes of product at the Browning Harvey plant in St. John's costs $100,000 plus $30,000
Question Value: 25 A pallette conveyor system used to transport pallettes of product at the Browning Harvey plant in St. John's costs $100,000 plus $30,000 to install. It is estimated to depreciate at a declining balance rate of 25% per year over its 15 -year useful life. Annual maintenance costs are estimated to be $9,000 for the first year, increasing by 20% every year thereafter. In addition, every third year, the rollers must be replaced at a cost of $9,000. Interest is at 8%. Construct a spreadsheet that has the following headings: Year, Salvage Value, Maintenance Costs, and the EAC of each of Capital Costs, Maintenance Costs and a Total Equivalent Annual Costs (as used in the lectures and is shown below). The economic life of the conveyor system is determined by the year that has the lowest Total Equivalent Annual Cost. Complete the row of the table below, inputting data for the row that has the lowest Total Equivalent Annual Cost from your spreadsheet for this project: NOTE: (Use 5 significant figures in your calculations and round the final answer to the nearest dollar.)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started