Question

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

1500

1300

1900

2200

Thank you

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Q1.
Initial investmente -50000
Annual operating cashflows:
Annual savings 15000
Less: Annual ccost 3000
Annual Cashflows 12000
Multiply: Annuity PVF at 8% 3.99271
present value of inflows 47912.52
Present value of salvage (10000*0.680583) 6805.83
Net present value 4718.35
Divide: Annuity PVF 3.99271
EUAW 1181.741
Q2.
Year Cashflows PVF at 8% Present Value
1 -1100 0.925926 -1018.52
2 -1500 0.857339 -1286.01
3 -1300 0.793832 -1031.98
4 -1900 0.73503 -1396.56
5 -2200 0.680583 -1497.28
Net present value -6230.35
Divide: Annuity PVF 3.99271
EUAC -1560.43
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
Using Microsoft Excel functions: 1. A machine will cost $50,000 to purchase. Annual operating cost will...
Using Microsoft Excel functions: 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%.
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
If the owner earns 6% interest on her investment determine the equivalent annual cost of owning...
If the owner earns 6% interest on her investment determine the equivalent annual cost of owning an SUV with the following costs: (EOY = end of year) Initial down payment = $2200 Annual payments = $5500, EOY1 – EOY4 Prepaid insurance = $1500, growing 6% annually Gas and oil, and minor maintenance = $2000 growing 8% annually. Replacement tires = $750 at EOY4 and $800 at EOY8 Major maintenance = $2400 at EOY5 Salvage value = $3750 at EOY9
Ms. Child is considering the purchase of a new food packaging system. The system costs $221,358....
Ms. Child is considering the purchase of a new food packaging system. The system costs $221,358. Ms. Child plans to borrow one-third of the purchase price from a bank at 4.5% per year compounded annually. The loan will be repaid using equal, annual payments over a 7-year period. The system is expected to last 15 years and have a salvage value of $22,445 at that time. Over the 15 year period, Ms. Child expects to pay $987 per year for...
Ms. Child is considering the purchase of a new food packaging system. The system costs $76342....
Ms. Child is considering the purchase of a new food packaging system. The system costs $76342. Ms. Child plans to borrow one-third of the purchase price from a bank at 4.5% per year compounded annually. The loan will be repaid using equal, annual payments over a 7-year period. The system is expected to last 15 years and have a salvage value of $21725 at that time. Over the 15 year period, Ms. Child expects to pay $1077 per year for...
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?
Exercise 6.4: Ajax Corporation would like to purpose a machine for $375,000 with a life span...
Exercise 6.4: Ajax Corporation would like to purpose a machine for $375,000 with a life span of 10 years. They estimate the salvage value to be 6% of the initial machine cost. If other operating costs are estimated to be $32,500 for the first year and increasing by 10% each year, what are the capital recovery cost and the equivalent uniform annual cost (EUAC) for total costs? The interest the company uses to justify their investments is 18% per year...
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.
Determine the equivalent uniform annual cost of a machine costing $4,000 with a life of 10...
Determine the equivalent uniform annual cost of a machine costing $4,000 with a life of 10 years and a salvage value of $300 (at year 10). Its operating expenses are $500 per years and your cost of capital is 12%. a. $1208 b. $1191 c.$930 d.$900 e. None of these are correct.
A company buys a machine for $25,000. The annual cost of maintaining the machine is $500...
A company buys a machine for $25,000. The annual cost of maintaining the machine is $500 per year for the first 5 years (End of Year 1 thru End of Year 5) and then it increases to $750 for the next 5 years (Year 6 thru Year 10). Consider all cash flows to be end of year cash flows. For an interest rate of 8% per year compounded yearly, find the annual maintenance cost of the machine and the present...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT