5. The owner of a tooling factory wants to find a use that will yield desirable
ID: 1130665 • Letter: 5
Question
5. The owner of a tooling factory wants to find a use that will yield desirable return on investment. After much study and calculation, the owner decides that the two best alternatives are: (5pts) Speciality $80,000 Commercially Available $120,000 First Cost Annual maintenance costs 3,000 Annual Income Useful life of equipment 20 Salvage Value 5,000 16,000 20 1,200 11,000 If the owner wants a minimum attractive rate ofretum on his investment of690, which of the two alternatives would you recommend? Pago Delete End rl Enter WARNING To reduce risk of serious injury, read Sadety&Comtort; Guide provided with product and at www..com Shift Alt CtrlExplanation / Answer
(1+MARR)
Annual Operatin Cost
Benefits
PW of AC
PW of Benefits
1.06
X
Y
X
Y
X
Y
X
Y
1
0.943396226
3000
5000
11000
16000
2830.188679
4716.981132
10377.35849
15094.33962
2
0.88999644
3000
5000
11000
16000
2669.98932
4449.9822
9789.96084
14239.94304
3
0.839619283
3000
5000
11000
16000
2518.857849
4198.096415
9235.812113
13433.90853
4
0.792093663
3000
5000
11000
16000
2376.28099
3960.468316
8713.030296
12673.49861
5
0.747258173
3000
5000
11000
16000
2241.774519
3736.290864
8219.839902
11956.13077
6
0.70496054
3000
5000
11000
16000
2114.881621
3524.802702
7754.565945
11279.36865
7
0.665057114
3000
5000
11000
16000
1995.171341
3325.285568
7315.62825
10640.91382
8
0.627412371
3000
5000
11000
16000
1882.237114
3137.061857
6901.536085
10038.59794
9
0.591898464
3000
5000
11000
16000
1775.695391
2959.492318
6510.883099
9470.375416
10
0.558394777
3000
5000
11000
16000
1675.184331
2791.973885
6142.342546
8934.316431
11
0.526787525
3000
5000
11000
16000
1580.362576
2633.937627
5794.662779
8428.600406
12
0.496969364
3000
5000
11000
16000
1490.908091
2484.846818
5466.662999
7951.509817
13
0.468839022
3000
5000
11000
16000
1406.517067
2344.195111
5157.229245
7501.424356
14
0.442300964
3000
5000
11000
16000
1326.902893
2211.504822
4865.310608
7076.81543
15
0.417265061
3000
5000
11000
16000
1251.795182
2086.325304
4589.915668
6676.240972
16
0.393646284
3000
5000
11000
16000
1180.938851
1968.231419
4330.109121
6298.340539
17
0.371364419
3000
5000
11000
16000
1114.093256
1856.822093
4085.008605
5941.830698
18
0.350343791
3000
5000
11000
16000
1051.031373
1751.718956
3853.781702
5605.500658
19
0.33051301
3000
5000
11000
16000
991.5390315
1652.565052
3635.643115
5288.208168
20
0.311804727
3000
5000
11000
16000
935.4141807
1559.023634
3429.851996
4988.87563
34409.76366
57349.60609
126169.1334
183518.7395
PW of AC of Commercial
-57349.60609
PW of AC of Speciality
-34409.76366
PW of Benefits of Y
183518.7395
PW of Benefits of X
126169.1334
Salvage Value Y
374.1656723
Salvage Value X
374.1656723
PW of Net Benefits for Commercial
126543.2991
PW of Net Benefits for X
92133.53542
Initial Cost of Comm
120000
Intial Cost of Speciality
80000
NPW for Comm
6543.299076
NPW for Speciality
12133.53542
ROR for Y
0.632716495
ROR for X
0.287917298
BC Ratio for Comm
1.054527492
BC Ratio for Speciality
1.151669193
Sent from Mail for Windows 10
(1+MARR)
Annual Operatin Cost
Benefits
PW of AC
PW of Benefits
1.06
X
Y
X
Y
X
Y
X
Y
1
0.943396226
3000
5000
11000
16000
2830.188679
4716.981132
10377.35849
15094.33962
2
0.88999644
3000
5000
11000
16000
2669.98932
4449.9822
9789.96084
14239.94304
3
0.839619283
3000
5000
11000
16000
2518.857849
4198.096415
9235.812113
13433.90853
4
0.792093663
3000
5000
11000
16000
2376.28099
3960.468316
8713.030296
12673.49861
5
0.747258173
3000
5000
11000
16000
2241.774519
3736.290864
8219.839902
11956.13077
6
0.70496054
3000
5000
11000
16000
2114.881621
3524.802702
7754.565945
11279.36865
7
0.665057114
3000
5000
11000
16000
1995.171341
3325.285568
7315.62825
10640.91382
8
0.627412371
3000
5000
11000
16000
1882.237114
3137.061857
6901.536085
10038.59794
9
0.591898464
3000
5000
11000
16000
1775.695391
2959.492318
6510.883099
9470.375416
10
0.558394777
3000
5000
11000
16000
1675.184331
2791.973885
6142.342546
8934.316431
11
0.526787525
3000
5000
11000
16000
1580.362576
2633.937627
5794.662779
8428.600406
12
0.496969364
3000
5000
11000
16000
1490.908091
2484.846818
5466.662999
7951.509817
13
0.468839022
3000
5000
11000
16000
1406.517067
2344.195111
5157.229245
7501.424356
14
0.442300964
3000
5000
11000
16000
1326.902893
2211.504822
4865.310608
7076.81543
15
0.417265061
3000
5000
11000
16000
1251.795182
2086.325304
4589.915668
6676.240972
16
0.393646284
3000
5000
11000
16000
1180.938851
1968.231419
4330.109121
6298.340539
17
0.371364419
3000
5000
11000
16000
1114.093256
1856.822093
4085.008605
5941.830698
18
0.350343791
3000
5000
11000
16000
1051.031373
1751.718956
3853.781702
5605.500658
19
0.33051301
3000
5000
11000
16000
991.5390315
1652.565052
3635.643115
5288.208168
20
0.311804727
3000
5000
11000
16000
935.4141807
1559.023634
3429.851996
4988.87563
34409.76366
57349.60609
126169.1334
183518.7395
PW of AC of Commercial
-57349.60609
PW of AC of Speciality
-34409.76366
PW of Benefits of Y
183518.7395
PW of Benefits of X
126169.1334
Salvage Value Y
374.1656723
Salvage Value X
374.1656723
PW of Net Benefits for Commercial
126543.2991
PW of Net Benefits for X
92133.53542
Initial Cost of Comm
120000
Intial Cost of Speciality
80000
NPW for Comm
6543.299076
NPW for Speciality
12133.53542
ROR for Y
0.632716495
ROR for X
0.287917298
BC Ratio for Comm
1.054527492
BC Ratio for Speciality
1.151669193
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