Find the economic service life of the new machine

Assignment Help Econometrics
Reference no: EM13238857

A company has a forklift, but is considering purchasing a new electric-lift truck that would cost of $18,000, have operating costs of 1000 in the first year, ,and have a salvage value of $10,000 at the end of the first year. For the remaining years, operating cost increase e4ach year by 14% over previous year's costs. Similarly. The salvage value declines each year by 25% from previous year's salvage value. The lift truck has a maximum life of seven years. An overhaul costing $3,000 and $4,500 will be required during the fifth and seventh years of service, respectively. The firm's required rate of return of 15%. Find the economic service life of this new machine.

Reference no: EM13238857

Questions Cloud

Indicate the points that delineate three stage of production : Suppose a furniture manufacturer is producing in the short run (with its existing plant and equipment). The manufacturer has observed the following levels of production corresponding to different numbers of workers
What is the companys range of profitability demand : The annual fixed cost for an inspecting and profiling web controller manufacturing company is $44,000 and variable cost is $38/unit. If selling price per unit is p = 495 -.05x, what is the company's range of profitability demand
What are the lowest frequency : Two waves are generated on a string of length 3.0 m to produce a three-loop standing wave with an amplitude of 4.6 cm, What are the lowest frequency
How much the postal service charge for each letter delivered : The postal service carrier works on Sunday delivering special high-priority letters. She can deliver 15 letters per hour. The hourly fixed costs (vehicle depreciation, insurance, etc.) equal $42, and the hourly variable costs
Find the economic service life of the new machine : A company has a forklift, but is considering purchasing a new electric-lift truck that would cost of $18,000, have operating costs of 1000 in the first year, ,and have a salvage value of $10,000 at the end of the first year.
What is the maximum investment cost allowed for lift system : A Chinese official is considering construction of a gondola lift system that transports visitors from the tops of the mountain peaks to the valley at one of the National Forrest Parks in China. The lift system is expected to last for 20 years.
What is the mass of the mud : Assume that the mud ends up uniformly distributed over a surface area of the valley measuring 0.3 km x 0.3 km, What is the mass of the mud sitting above a 4 m2 area of the valley floor
Use study period of 8 years and the pw method : Lumberjack Power, operator of a nuclear plant, is planning to replace its current equipment with some that is more environmental friendly. The old equipment has annual operating expenses of $6,750 and can be kept for 8 more years.
How much would it cost to fence exactly four such properties : How much would it cost to fence exactly four such properties, which together would contain four square miles of area Now, consider how much it would cost to fence in four square miles of ranch land if, instead, it comes as a single large square

Reviews

Write a Review

Econometrics Questions & Answers

  What price will it set and how much money will it make

Suppose that a paper mill "feeds" a downstream box mill. For the downstream mill, the marginal profitability of producing boxes declines with volume. The 1st unit of boxes increases earnings by $10, the 2nd by $9, the third $7, and so on, until th..

  What will be the mpc of disposable income

Why don't we say that the public will spend ((0.6+0.2) * 150), or 120, and Y will increase by 600. After all, when we talk about domestic investment, it's not only government that invests in the economy - people do too, right

  Find what money growth rate should the fed aim

Suppose that the Fed's inflation target is 2%, potential output growth is 3.5%, and velocity is a function of how much the interest rate differs from 5%: %^V= 0.5 X (i-5). Suppose that a model of the economy suggests that the real interest rate is..

  What amount should you bid to maximize the probability

Suppose we are interested in bidding on a piece of land and we know one other bidder is interested.1 The seller announced that the highest bid in excess of $10,000 will be accepted. Assume that the competitor's bid x is a random variable that is u..

  Estimate for the estimated mean mpg mileage

The EPA tests vehicles for gasoline mileage under stringent testing conditions. The testing for a particular make and model of mid-sized SUV involved 35 vehicles submitted by the manufacturer. Assume the vehicles submitted for testing constitute a..

  How much economic profit will it earn in a typical month

A firm called Altobella Vineyard produces Concord grapes in a perfectly competitive market in which monthly demand is given by the equation Q = 1800 - 16P and monthly supply by the equation Q = -660 + 14P, where P is the price per crate of grapes.

  How much should the store charge for each rental

A local video store estimates their average customer's demand per year is Q = 7 - 2P, and knows the marginal cost of each rental is 50 cents. How much should the store charge for each rental if it engages in optimal two-part pricing

  By how much does output increase or decrease

Given the following information calculate the multiplier effect on Y, i.e. by how much does output increase or decrease by (Y), if Unless told otherwise, assume other factors are held constant. For example if you are told that only government spend..

  Calculate harrys production of large pepperoni pizzas

This year Harry's again produced 10,000 large pepperoni pizzas (identical to last year's pizzas), but sold them for $12 each. Based on this information we can conclude that Harry's production of large pepperoni pizzas this year.

  Explain what will result in terms of excess demand or supply

1. The widget industry is perfectly competitive. The industry demand and supply functions for widgets are given below. Qd = 424 - 40P Qs = 40 + 8P a. What is the equilibrium price and quantity for the industry

  What is the interest rate for buying versus leasing

A bulldozer can be purchased for $380,000 and used for 6 years, when its salvage value is 15% of the first cost. Alternatively, it can be leased for $60,000 a year. Remember that lease payments occur at the start of the year.

  What happens to princeton banks balance sheet

Suppose that the Fed raises the reserve requirement on transactions deposits to 0.18 = 18%. What happens to Princeton Bank's balance sheet Does it have excess reserves, or is it short of reserves? Calculate the new M1 and M2 multipliers. What happ..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd