Question

Compute an equivalent annual cost over a single 5 year maintenance cycle. MARR is 10% per...

Compute an equivalent annual cost over a single 5 year maintenance cycle. MARR is 10% per year compounded annually.

End of Year Maintenance cost
1 20 million
2 30 million
3 30 million
4 30 million
5 80 million
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
End of Year Maintenance cost in million $ PVIF at 10% PV at 10%
1 20 0.90909 $           18.18 million $
2 30 0.82645 $           24.79 million $
3 30 0.75131 $           22.54 million $
4 30 0.68301 $           20.49 million $
5 80 0.62092 $           49.67 million $
3.79079 $         135.68 million $
Equivalent annual cost = 135.68/3.79079 = $           35.79 million $
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
What single amount, at the end of the fourth year, is equivalent to a uniform annual...
What single amount, at the end of the fourth year, is equivalent to a uniform annual series of $5,000 per year for 10 years, if the interest rate is 8% per year, compounded annually?
What single amount, at the end of the fourth year, is equivalent to a uniform annual...
What single amount, at the end of the fourth year, is equivalent to a uniform annual series of $5,000 per year for 10 years, if the interest rate is 8% per year, compounded  annually? * Answer to expert question. This is what was given so not sure on your question about cash flows.
A corporate jet costs $1,350,000 and will incur $200,000 per year in fixed cost (maintenance, …)...
A corporate jet costs $1,350,000 and will incur $200,000 per year in fixed cost (maintenance, …) and $277 per hour variable cost (fuel, …). The jet will be operated 1200 hours per year for 5 years and then sold for $650,000. The jet revenues $1,000 per hour. The MARR is 15% per year. Determine the Equivalent Uniform Annual Cost (EUAC) of the jet.
Show your complete solution. Draw the cash-flow diagram of the following problem. The maintenance cost of...
Show your complete solution. Draw the cash-flow diagram of the following problem. The maintenance cost of a certain equipment is ₱ 32,000 per year for the first five years, ₱ 45,000 per year for the next five years and ₱ 15,000 at the end of the 4th year and 6th year. Find the equivalent uniform annual cost of maintenance if money is worth 10% compounded annually.
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...
A corporate jet costs $1,350,000 and will incur $200,000 per year in fixed cost (maintenance, …)...
A corporate jet costs $1,350,000 and will incur $200,000 per year in fixed cost (maintenance, …) and $277 per hour variable cost (fuel, …). The jet will be operated 1200 hours per year for 5 years and then sold for $650,000. The jet revenues $1,000 per hour. The MARR is 15% per year. Determine the following: a. Capital Recovery (CR) value of the Jet b. The Annual Worth (AW) of the Jet c. Equivalent Uniform Annual Cost (EUAC) of the...
Compare two mutually exclusive alternatives below using annual worth analysis at MARR = 10% per year....
Compare two mutually exclusive alternatives below using annual worth analysis at MARR = 10% per year. Which alternative should be selected? Alternatives Alternative 1 Alternative 2 First cost, $ -90,000 -750,000 Annual cost, $/year -50,000 -10,000 Salvage value, $ 8,000 - Life, years 5 ∞ Alternative 2 and -$85,000 Alternative 1 and -$72,450 Alternative 2 and -$72,450 Alternative 1 and -$65,000
Your company must either purchase or make 100,000 units per year over the next 5 years....
Your company must either purchase or make 100,000 units per year over the next 5 years. To make the products yourselves, the project requires an $11 Million investment at n=0, and it requires $1.4 Million per year in operating expenses. In addition, a $2 Million dollar one-time machinery overhaul must be performed at the end of year 3. Assume the machinery has a salvage value of $1 Million at the end of year 5. Finally, assume that raw materials and...
6. The estimated maintenance expense of a machine: YEAR | Maintenance Cost 1 |   $100 2...
6. The estimated maintenance expense of a machine: YEAR | Maintenance Cost 1 |   $100 2 |   $200 3 | $300 4 | $400 What is the equivalent uniform annual maintenance cost for this machine if 6% interest is used?
A corporate jet costs $1,350,000 and will incur $200,000 per year in fixed cost (maintenance, …)...
A corporate jet costs $1,350,000 and will incur $200,000 per year in fixed cost (maintenance, …) and $277 per hour variable cost (fuel, …). The jet will be operated 1200 hours per year for 5 years and then sold for $650,000. The jet revenues $1,000 per hour. The MARR is 15% per year. Determine the Annual Worth (AW) of the jet.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT