User Account

All Pages

Find the optimum replacement interval for equipment

Assignment Help Microeconomics
Reference no: EM133124440

A tractor can be purchased for $45,000. Annual O&M costs are expected to increase $1,500 every year, with a 1st year O&M cost of $3,000.

(MARR = 26%, and planning horizon is 10 years)

The compressor salvage value for a given period t, is calculated based on the following equation:

Salvage value (t) = $30,000- $3,000 * t

(a) Find the Optimum Replacement Interval for this Equipment

(b) Find the Optimum Replacement Interval for this Equipment if the O&M costs is increased to $1,700/yr. What is your conclusion?

(c) Find the Optimum Replacement Interval for this Equipment if the initial cost is reduced to $40,000. What is your conclusion? (independent of part b)

Reference no: EM133124440

Questions Cloud

Examine the plates exposed to the airborne : Examine the plates exposed to the airborne and external body surfaces bacteria. Count the number of colonies formed by the different microorganisms
Creating the software cost : Shaughnessy Consulting, LLC currently enjoys a patent on software that estimates economic damages for clients involved in personal injury lawsuits. Demand for m
Effective rate of protection on the process : For a company that produces candy canes, sugar is 70 percent of its ingredient costs. The United States limits the imports of sugar to protect cane farmers, whi
Calculate the total effect on welfare of a tariff : A small country can import a good at a world price of 5 per unit. The domestic supply curve of the good is S = 10 + 10P. The demand curve is D = 600 - 5P. In ad
Find the optimum replacement interval for equipment : A tractor can be purchased for $45,000. Annual O&M costs are expected to increase $1,500 every year, with a 1st year O&M cost of $3,000.
Microbes in the environment : Use a sterile swab moistened with sterile water to swab the interdigital spaces of the left hand of one individual in your pair.
Explain the analysis and a cash flow approach : (a) Clearly show the cash flow profile for each alternative using a cash flow approach (insider's viewpoint approach).
Explain how moral hazard in credit markets lead : Explain how moral hazard in credit markets lead to credit rationing.
Discuss why sharecropping contracts may be preferred : Briefly discuss why sharecropping contracts may be preferred over rent contracts in developing countries. Is there any empirical evidence that this takes place?

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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