1) A ski resort wishes to evaluate two alternative machines for ski and board tu
ID: 1143270 • Letter: 1
Question
1) A ski resort wishes to evaluate two alternative machines for ski and board tuning. Select the best alternative using the AW method at 9% per year Machine R Machine S First cost, $ 250,000 40,000 370,500 -50,000 nnual operating cost, S per year Life, years Salvage value, S 20,000 20,000 2) An engineer is evaluating two robots that can inspect the interior of buried potable water pipes for the City of Laredo Utilities Department. Select one using an AW comparison, i-10% per year, and a 3-year study period Robot A: P S-85,000; annual maintenance and operation costs -30,000; S- $40,000 Robot B: P- S-97,000; annual maintenance and operation costs S-27,000; S- $42,000 3) Maldonado Auto Group sells and services imported and domestic luxury cars. The owner, Sofia, is considering either outsourcing all of the new auto warranty service work over a 5-year contract basis or continue to do warranty work in-house indefinitely. Using the estimates below (in millions), help Sofia by performing an annual worth evaluation at 12% per year to select the best option ontract In-house First cost, $ 30 nnual cost, $ per year nnual income, $ per year 2.5 Life, years 4) Engineers at a canning company are looking for more efficient alternatives to produce the finish on the aluminum can surface. Select one of the technologies mentioned below at MARR-8% and using AW analysis Brushing: P-3-400,000, n = 10 years. S = $50,000, AOC-$-50,000 in year 1, decreasing by $5,000 annually starting in year 2. Bead blasting: P $-300,000; assume permanent life; no salvage; AOC -50,000Explanation / Answer
(1)
AW is computed as follows.
AW, Machine R ($) = - 250,000 x A/P(9%, 3) - 40,000 + 20,000 x P/F(9%, 3) x A/P(9%, 3)
= - 250,000 x 0.3951** - 40,000 + 20,000 x 0.7722** x 0.3951**
= - 98,775 - 40,000 + 6,102
= - 132,673
AW, Machine S ($) = - 370,500 x A/P(9%, 5) - 50,000 + 20,000 x P/F(9%, 5) x A/P(9%, 5)
= - 370,500 x 0.2571** - 50,000 + 20,000 x 0.6499** x 0.2571**
= - 95,256 - 50,000 + 3,342
= - 141,914
Since machine R has a lower negative AW, machine R should be selected.
**From A/P and P/F Factor tables
NOTE: As per Chegg Answering Policy, 1st question has been answered.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.