Question

A construction company has three choices of the type of machine to be used for their...

A construction company has three choices of the type of machine to be used for their project (interest rate is 7% for all options). Which Manufacturer should this company choose? (Show calculations and draw graphical representation)The choices are as following:

a. Machine sold by manufacturer A- This machine has an initial cost of $750,000, Salvage value of 100,000 sold after 50 years, and the variable cost of $55 per hour and maintenance cost of $4 per hour of usage.

b. Machine sold by manufacturer B- This machine has an initial cost of $550,000, Salvage value of 50,000 sold after 50 years, and the variable cost of $75 per hour and maintenance cost of $7 per hour of usage.

c. Machine sold by manufacturer C- This machine has an initial cost of $250,000, Salvage value of 10,000 sold after 50 years, and the variable cost of $95 per hour and maintenance cost of $10 per hour of usage.

Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
A construction company has three choices of the type of machine to be used for their...
A construction company has three choices of the type of machine to be used for their project (interest rate is 7% for all options). The choices are as following: a. Machine sold by manufacturer A- This machine has an initial cost of $750,000, Salvage value of 100,000 sold after 50 years, and the variable cost of $55 per hour and maintenance cost of $4 per hour of usage. b. Machine sold by manufacturer B- This machine has an initial cost...
A small aerospace company is evaluating two alternatives: the purchase of an automatic-feed machine and a...
A small aerospace company is evaluating two alternatives: the purchase of an automatic-feed machine and a manual-feed machine for a product’s finishing process. The auto-feed machine has an initial cost of $23,000, an estimated salvage value of $4,400 and a predicted life of 10 years. One person will operate the machine at a cost of $12 an hour. The expected output is 8 tons per hour. Annual maintenance and operating cost is expected to be $3,500. The manual-feed machine has...
A company is analyzing a pressing machine to acquire. The purchasing price of this machine is...
A company is analyzing a pressing machine to acquire. The purchasing price of this machine is $300,000. This machine will be used towards pressing 1,000 products every 6 months, which each will be sold for $50. Its operating and maintenance cost will be $7000 in the first semi-annual and it increases by $500 every six months (semi-annual) after that till the end of its useful life, which year 7. The salvage value at the end of year 7 will be...
13-30 A $25,000 machine that has been used for one year has a salvage value of...
13-30 A $25,000 machine that has been used for one year has a salvage value of $16,000 now, which will drop by $4,000 per year. The maintenance costs for the next 4 years are $1,250, $1,450, $1,750 and $2,250. When the machine is sold, it will cost $2,000 to remove and sell. When machine was purchased, the estimated salvage in 5 years was $3,500. What is the marginal cost for each year?
Colombia Company has provided the following data for maintenance cost: Prior Year Current Year   Machine hours...
Colombia Company has provided the following data for maintenance cost: Prior Year Current Year   Machine hours 18,000        20,300          Maintenance cost $34,700        $37,460        Maintenance cost is a mixed cost with variable and fixed components. The fixed and variable components of maintenance cost are closest to: rev: 12_20_2016_QC_CS-72978 $13,100 per year plus $.833 per machine hour $24,360 per year plus $.833 per machine hour $13,100 per year plus $1.20 per machine hour $34,700 per year plus $1.20 per...
A company is considering the purchase of a machine. For this he has received two proposals...
A company is considering the purchase of a machine. For this he has received two proposals that meet the requested technical requirements. The considerations economic of each machine are the following: Machine A Machine B Initial cost $ 60,000 $ 40,000 Maintenance cost in the first year 5,000 8,000 Annual increase in maintenance cost 600 10% Shelf life (years) 8 4 Salvage Value 6,000 4,000 Considering an interest rate of 5% capitalized annually, what machine would you recommend Use the...
Esquire Company needs to acquire a molding machine to be used in its manufacturing process. Two...
Esquire Company needs to acquire a molding machine to be used in its manufacturing process. Two types of machines that would be appropriate are presently on the market. The company has determined the following: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) Machine A could be purchased for $35,750. It will last 10 years with annual maintenance costs of $1,300 per year....
Machine X has an initial cost of $12,000 and annual maintenance of $700 per year. It...
Machine X has an initial cost of $12,000 and annual maintenance of $700 per year. It has a useful life of four years and no salvage value at the end of that time. Machine Y costs $22,000 initially and has no maintenance costs during the first year. Maintenance is $200 at the end of the second year and increases by $200 per year thereafter. Machine Y has a useful life of eight years and an anticipated salvage value of $5,000...
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
A construction company is deciding whether to build a road or a building at a new...
A construction company is deciding whether to build a road or a building at a new township site. The road will cost $50 million to build in 2019 and will require a re-construction every 5 years of the road’s operation at the cost of $10 million. The annual maintenance costs of the road are $5 million per year for the first ten years of the road’s operation and $7 million per year thereafter. The building will cost $100 million to...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT