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An injection molding system has a first cost of $180,000 and an annual operating cost of...

An injection molding system has a first cost of $180,000 and an annual operating cost of $77,000 in years 1 and 2, increasing by $6,000 per year thereafter. The salvage value of the system is 25% of the first cost regardless of when the system is retired within its maximum useful life of 5 years. Using a MARR of 10% per year, determine the ESL and the respective AW value of the system.

The ESL is year(s) and AW value of the system is $

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Answer #2

We will first calculate the present worth of the machine then convert it to annual worth.

PW1 = $ 209,090.91

PW2 = $ 276,446.28

PW3 = $ 342,186.33

PW4 = $ 406,048.08

PW5 = $ 467,829.76

Therefore, the ESL is 5 years. Annual worth of the system in 5 th year = $ 123,412.31.

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answered by: anonymous
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