Log in
Economics
1
answer
0
watching
986
views

A machine has a first cost of $24000. Its market value declines by 20% annually. The repair costs are covered by the warranty in Year 1, and then they increase $900 per year. The firm's MARR is 12%. Find the minimum EUAC for this machine and its economic life.

Watch
1
answer
0
watching
986
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Chika Ilonah
Chika IlonahLv10
28 Sep 2019

Unlock all answers

Get 1 free homework help answer.
Already have an account? Log in
Share

Related textbook solutions

Principles of Economics
2nd Edition, 2017
Openstax
ISBN: 9781947172364
Principles of Macroeconomics
2 Edition,
Openstax
ISBN: 9781947172388
Principles of Microeconomics
2 Edition,
Openstax
ISBN: 9781947172340

Related questions

A vehicle has a first cost of $25000. Its market value declines by 15% annually. It is used by a firm that estimates the effect of older vehicles on the firm's image. A new car has no "image cost". But the image cost of older vehicles climbs by $800 per year. The firm's MARR is 10%. Find the minimum EUAC for the vehicle and its economic life.

Yellowjacket, Inc., a large textile company, is trying to decide how long it should retain one of its machines used in the sludge dewatering processes. The machine currently is estimated to have a $35,000 market value and a future market value of $18,000 next year, decreasing $1,700 per year over its remaining maximum useful life of 8 years. The operating cost is expected to be $5,500 next year, increasing by $450 each year thereafter. If the company's MARR is 15% per year, what is the EUAC for an economic service life of 1 year?

 

A company is considering replacing a painting machine purchased 9 years ago for $700,000. It has a market value today of $40,000. The unit costs $350,000 annually to operate and maintain. A new unit can be purchased for $800,000 and will have annual O&M costs of $120,000. If the old unit is retained, it will have no salvage value at the end of its remaining life of 10 years. The new unit, if purchased, will have a salvage value of $100,000 in 10 years. Analyze this using an EUAC measure and a MARR of 20% to perform a before-tax analysis to see if the painting machine should be replaced if the old painting machine is taken in as a trade-in for its market value of $40,000.

a. Use the cash flow approach 

Weekly leaderboard

Home
Homework Help 3,900,000
Economics 400,000
Start filling in the gaps now
Log in