Engineering Economics, Please just type A B C D, transactions are not important

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Engineering Economics, Please just type A B C D, transactions are not important just true choice

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An injection molding machine can be purchased and installed for $90,000. It is expected to be kept in service for eight years. It is believed that $10,000 can be obtained when the machin is disposed of the at the end of year eight. The net annual value added that can be attributed to this machir is constant over eight years and amounts to $15,000. An effective income tax-rate of 40% is used by the company, and the before-tax MARR equals 25% per year. Use 150% Declining Balance depreciation method. Answer the following questions based on above given information What are the depreciation amounts in year one and year eight? Your salary was projected to increase at the rate of 4% per year, and the general price inflation rate was expected to be 6% per year. Your resulting estimated salary fort he four years in actual and real dollars was asfollow $12,861 and $4,014 End of Year, k Salary (A Salary(R B. $11,861 and $4,061 45,000 45,000 C. $15,861 and $5,068 46,800 44,15 48,672 43,318 D. 0,56 and $3,016 50,619 12,500 What is the present worth (PM) of the four year actual dollar salary cash flows at the end of year one (base year) if yo personal MARRm is 10% per year? A. 165,798 B. 170,000 What he ATC at th d of ye d 6 C. 166.000 0,144 and $2,211 D. 200,000 B. $11,122 and $11,211 C. 4,144 and $12,211 D. 2,144 and $12,211 What is the present worth (PW) of the four-year real- dollar salary cash flows at the end of year one (base year) if your personal MARRmis 10% per year? A. 165,789 B. 164,789 What are the BTCF, TI, T and ATCF ofyear 8? C. 170.789 $25,000, $20,986, $8,394, and $16,606 D. 150,178 A. 5,000 0,986, $4,394 0,606 C. $10,000, $10,000, $4,000 and $6,000 D. $23,000, $21,986, 7,394, and $1,606 Your company is considering the introduction of a new product line. The initial investment required for this project is $500,000, and annual maintenance costs are anticipated to be $35,000. Annual operating cost will be directly in proportion to the level of production at $7.50 per unit, and each unit of product can be sold for $50.00. If the project has a life of five years, what is the minimum annual production level for which this project is economicallyviable? Work this problem on an after tax basis. Assume five-year SL depreciation (SV5 0), and effective income tax rate of 40% and an after-tax MARR of 10% per year. 5400$ A. B. 4428 C. 5000 D. 4430 XYZ rapid prototyping (RP) software costs $20,000, lasts one year and will be expensed (i.e., written off in Th cost of the upgrades will increase 10% per year, starting at the beginning of year two. How much can be spent now for an RP software upgrade agreement that lasts thre st be dep ated with SL method t MARR 20% per ye d the effect ate (t 34% A. 45 B. 50 C. 40 D. 55

Explanation / Answer

Since, there are multiple questions, all the subparts of first question have been answered.

Part 1)

We will have to use the MACRS table for a 7 Year class property. The depreciation rates for Year 1 will be 14.29% and 4.46% for year 1 and year 8 respectively. The formula for calculating depreciation is:

Annual Depreciation = Cost of Machine*Depreciation Rate

____________

Using the values provided in the question, we get,

Annual Depreciation (Year 1) = 90,000*14.29% = $12,861

Annual Depreciation (Year 8) = 90,000*4.46% = $4,014

Answer is Option A ($12,861 and $4,014)

__________________

Part 2)

Year BTCF Depreciation Total Income (BTCF

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