Question

A contractor is looking to purchase a new triax dump truck. Based upon an annual interest...

A contractor is looking to purchase a new triax dump truck. Based upon an annual interest rate of 8%, which dump truck has the lowest EUAC and what is it?

Dump Truck A Dump Truck B
Purchase Price $75,000 $120,000
Annual Maintenance $15,000 $12,000
Salvage Value $16,000 $20,000
Useful Life 8 years 18 years

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A construction contractor needs to choose between two suppliers of dump trucks. Supplier 1 has an...
A construction contractor needs to choose between two suppliers of dump trucks. Supplier 1 has an initial cost of $125,000 and annual operating cost of $25, 000 per year.   Supplier 2 has initial cost $160,000 and has annual operating cost of 20,000 per year. The truck fleet has the same 10-year life forecast   Based on incremental rate of return (IROR) and a MARR of 8%, and which supplier of trucks should the contractor choose? SHOW WORK AND DONT USE EXCEL
A pipeline contractor can purchase a needed truck for $42,000. Its estimated life is 6 years,...
A pipeline contractor can purchase a needed truck for $42,000. Its estimated life is 6 years, and it has no salvage value. Maintenance is estimated to be $3,100 per year. Operating expense is $60 per day. The contractor can hire a similar unit for $190 per day. MARR is 7%. a. How many days per year must the truck’s services be needed such that the two alternatives are equally costly? b. If the truck is needed for 180 days/year, should...
The initial cost of a new machine is 10, 000. the annual maintenance cost is 2000...
The initial cost of a new machine is 10, 000. the annual maintenance cost is 2000 for the first two years, then increases 1000 every year after that. The machine has 10 years useful life with salvage value of 4000. Calculate EUAC for keeping the machine
Using Microsoft Excel: 1. A machine will cost $50,000 to purchase. Annual operating cost will be...
Using Microsoft Excel: 1. A machine will cost $50,000 to purchase. Annual operating cost will be $3,000. This machine will save $15,000 per year in labor costs. The salvage value after 5 years will be $10,000. Calculate the machine’s equivalent uniform annual worth (EUAW) for the interest rate of 8%. 2. The maintenance cost for a generator have been recorded over its five year life. Calculate EUAC at 8 percent per year. Year 1 2 3 4 5 Cost $1100...
A contractor is considering whether to buy or lease a new machine for her layout site...
A contractor is considering whether to buy or lease a new machine for her layout site work. Buying a new machine will cost $12,000 with a salvage value of $1200 after the machine's useful life of 8 years. On the other hand, leasing requires an annual lease payment of $3000. Assuming that the MARR is 15% and on the basis of an internal rate of return analysis, which alternative should the contractor be advised to accept? Part A: – Do...
a contractor needs a bulldozer. He can purchase it from the market or rent it from...
a contractor needs a bulldozer. He can purchase it from the market or rent it from a dealer . A used bulldozer with a remaining life of 10 years and QR 10,000 salvage value can be purchased for QR 40,000. The annual maintenance cost of the used bulldozer is assumed to be QR 20,000 per year. In addition, operating Cost of the bulldozer is expected to be QR 25 per hour. Alternatively, a bulldozer can be rented for Qr 150/hr...
A recycling company is looking to purchase a machine based on two options Machine A Machine...
A recycling company is looking to purchase a machine based on two options Machine A Machine B Initial cost AED 66,000 102,000 Annual cost/year AED 16,000 7,000 Salvage Value AED 8,000 22,000 Useful life in years 3 6 Using an interest rate of 12%, you must decide which machine is to be purchased by using a future worth (FW) analysis       -       A.       B.       C.       D.       E.      ...
Q2- Data for two very expensive printers are listed below. If the interest rate is 12%,...
Q2- Data for two very expensive printers are listed below. If the interest rate is 12%, based on equivalent uniform annual cost (EUAC), which printer should be bought? please explain all steps and show equations. thank you. A B First Cost $30,000 $36,000 Annual Maintenance 1,500 2,000 Salvage value 5,000 8,000 Useful life 6 years 6 years
41. Evaluating Alternative Investments. Washington Brewery has two independent investment opportunities to purchase brewing equipment so...
41. Evaluating Alternative Investments. Washington Brewery has two independent investment opportunities to purchase brewing equipment so the company can meet growing customer demand. The first option (equipment A) requires an initial investment of $230,000 for equipment with an expected life of 5 years and a salvage value of $20,000. The second option (equipment B) requires an initial investment of $120,000 for equipment with an expected life of 4 years and a salvage value of $15,000. The company’s required rate of...
Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the...
Gluon Inc. is considering the purchase of a new high pressure glueball. It can purchase the glueball for $120,000 and sell its old low-pressure glueball, which is fully depreciated, for $20,000. The new equipment has a 10-year useful life and will save $28,000 a year in expenses. The opportunity cost of capital is 12%, and the firm’s tax rate is 40%. What is the equivalent annual savings from the purchase if Gluon uses straight-line depreciation? Assume the new machine will...