can you show the work and how you got this thank you!!!~ A semiconductor manufac
ID: 2689534 • Letter: C
Question
can you show the work and how you got this thank you!!!~
A semiconductor manufacturer has been ordered by the city to stop discharging acidic waste liquids into the city sewer system. Your analysis shows you should select one of the following three systems. The system is expected to be used for 20 years, but the CleanH2O system will only last for 10 years, and then will need to be replaced with an identical system. If the cost of money is 8%, which system should be purchased? Do a pre-tax analysis.Explanation / Answer
for clean H20:
installing cost = 30,000 +PV(0.08,10,0,30000) = 43,896
annual ope. cost = 5000
hence PV(future annual cost) =PV(0.08,20,5000) = 49,091
hence PV(salvage value) = PV(0.08,10,0,2000) + PV(0.08,20,0,2000) = 1355.48
hence at present total costs are 43,896+49091 - 1355.48 = 91631.5
hence EUAW = PMT(0.08,20,-91631.5) = $9,332.87
for acid free:
installing cost = 35,000
annual ope. cost = 5000
hence PV(future annual cost) =PV(0.08,20,5000) = 49,091
hence PV(salvage value) = PV(0.08,20,0,5000) = 1072.74
hence at present total costs are 35,000+49091 - 1072.74 = 83018.26
hence EUAW = PMT(0.08,20,-83018.26) = $8,455.60
for evergreen:
installing cost = 80,000
annual ope. cost = 1000
hence PV(future annual cost) =PV(0.08,20,1000) = 9818.15
hence PV(salvage value) = PV(0.08,20,0,40000) = 8,582
hence at present total costs are 80,000+9818.15 - 8,582 = 81,236.15
hence EUAW = PMT(0.08,20,-81236.15) = $8,274
hence on the basis of EUAW evergreen has the least EUAW of 8,274. hence evergreen should be purchased
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