Question

Yupi Inc. is considering replacing a machine. These are the data for both the used and...

Yupi Inc. is considering replacing a machine. These are the data for both the used and new machine.

Used machine: the machine was purchased for $17,130 one year ago, the current salvage value is $10073 and is expected to have a scrap value of $6734 whenever it is retired. This used machine still has 3 years left of service. From now on, the operating and Maintenance costs are $2383 for the first year and expected to increase by $1967 thereafter.

New Machine: machine costs $13491 and is expected to have a scrap value of $8983 whenever it is retired. Operating and Maintenance costs are $1475 for the first year and expected to increase by $1079 thereafter. The service life of this machine is 3 years.

If the MARR is 12%, determine the minimum equivalent uniform annual cost associated with the optimal economic life of the machine that offers the lowest EUAC.

THE CORRECT ANSWER IS 5427.51, I DON'T KNOW HOW TOGETTO THIS RESULT.

Business   Finance   
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
An industrial sewing machine costs $6760 and is expected to have a scrap value of $3732...
An industrial sewing machine costs $6760 and is expected to have a scrap value of $3732 whenever it is retired. Operating and Maintenance costs are $1852 for the first year and expected to increase by $1923 thereafter. If the MARR is 9%, determine the minimum equivalent uniform annual cost associated with the optimal economic life of the machine. The service life of this machine is 5 years
Advanced Electrical Insulator Company is considering replacing a broken inspection machine, which has been used to...
Advanced Electrical Insulator Company is considering replacing a broken inspection machine, which has been used to test the mechanical strength of electrical insulators, with a newer and more efficient one. If repaired, the old machine can be used for another five years, although the firm does not expect to realize any salvage value from scrapping it in five years. Alternatively, the firm can sell the machine to another firm in the industry now for $7,500. If the machine is kept,...
A firm is considering replacing a machine that has been used to make a certain kind...
A firm is considering replacing a machine that has been used to make a certain kind of packaging material. The new, improved machine will cost $32,000 installed and will have an estimated economic life of 10 years, with a salvage value of $2,500. Operating costs are expected to be $1,000 per year throughout the service life of the machine. The old machine (still in use) had an original cost of $25,000 four years ago, and at the time it was...
A company is considering replacing an old equipment with a new, more advanced machine. The new...
A company is considering replacing an old equipment with a new, more advanced machine. The new machine costs $100,000, will be used for 5 years, and with a salvage value of $10,000. The old machine has a current book value of $55,000, has 5 years of life remaining, an after-tax salvage value of $55,000 today and $5,000 (after-tax) after 5 years, and an annual depreciation of $10,000. The new machine is expected to increase annual sales by $30,000, and an...
VYS Inc will purchase a new machine that costs $30,000 and is expected to last 12...
VYS Inc will purchase a new machine that costs $30,000 and is expected to last 12 years with a salvage value of $3,000. Annual operating expenses for first year is $9,000 and increase by $200 each year thereafter. Annual income is expected to be $12,000 per year. If VYS’s MARR is 10%, determine the NFW of the machine purchase.
Mill Inc. is considering replacing a machine that has been used in its factory for four...
Mill Inc. is considering replacing a machine that has been used in its factory for four year. Relevant data associated with the operations of the old machine and the new machine, neither of which has any estimated residual value, are as follows: Old Machine Cost of machine, 10-year life $95,000 Annual depreciation (straight-line) 11,000 Annual manufacturing costs, excluding depreciation 28,000 Annual nonmanufacturing operating expenses 8,000 Annual revenue 80,000 Current estimated selling price of machine 30,000 New Machine Purchase price of...
"Jacobson Inc. is considering replacing one of its CNC machines with one that is newer and...
"Jacobson Inc. is considering replacing one of its CNC machines with one that is newer and more efficient. The firm purchased the CNC machine 9 years ago at a cost of $137,000. The machine had an expected economic life of 13 years at the time of purchase and an expected salvage value of $14,000 at the end of the 13 years. The original salvage estimate is still good, and the machine has a remaining useful life of 4 years. The...
The Wu Lighting Company is considering replacing an old, relatively inefficient vertical drill machine that was...
The Wu Lighting Company is considering replacing an old, relatively inefficient vertical drill machine that was purchased 7 years ago at a cost of $14,000. The machine had an original expected life of 12 years and no salvage value at the end of that period. The divisional manager reports that a new machine can be purchased. Over its five-year life, the new machine will expand sales from $11,000 to $19,000 a year and will reduce the usage of labor and...
A company is considering replacing an old machine with a new one. The old machine is...
A company is considering replacing an old machine with a new one. The old machine is completely depreciated and can be sold for $100,000 in the market. The company intends to sell this machine if it is replaced. The new machine costs $400,000. The replacement of the machine will require an increase in the inventories by $200,000 in addition, accounts receivables will increase by $75,000. The new machine is going to be depreciated over 3 years to 0 salvage value....
A company is considering replacing a machine that was bought six years ago for ?$52,000. The?...
A company is considering replacing a machine that was bought six years ago for ?$52,000. The? machine, however, can be repaired and its life extended five more years. If the current machine is? replaced, the new machine will cost ?$44,000 and will reduce the operating expenses by ?$6,300 per year. The seller of the new machine has offered a? trade-in allowance of ?$14,700 for the old machine. If MARR is 6?% per year before? taxes, how much can the company...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT