What is the difference in the equivalent uniform annual cost

Assignment Help Business Economics

Reference no: EM13832721

Machine A was purchased three years ago for $10,000 and had an estimated market value of $1,500 at the end of its 10-year life. Annual operating costs are $1,250. The machine will perform satisfactorily for the next seven years. A salesman for another company is offering Machine B for $55,000 with an market value of $5,500 after 10 years. Annual operating costs will be $850. Machine A could be sold now for $12,000, and MARR is 29% per year. Using the outsider viewpoint, what is the difference in the equivalent uniform annual cost (EUAC) of buying Machine B compared to continuing to use Machine A; i.e., EUAC(Machine B) – EUAC(Machine A).

Reference no: EM13832721

Questions Cloud

Present worth for the flood control project : A flood control project with a life of 15 years will require an investment of $250,000 and annual maintenance costs of $20,000. The project will provide no benefits for the first two years but will save $60,000 per year in flood damage starting in th..

Considering construction of flood control dike : A state government is considering construction of a flood control dike having a life span of 12 years. History indicates that a flood occurs every 4 years, on average, and causes $500,000 in damages on each occasion. If the state uses a MARR of 12% p..

Challenges in policing and law enforcement : Challenges in Policing and Law Enforcement- The criminal justice system is primarily concerned with law enforcement and the search for justice, and the police are the first point of contact in this system

Example of an economic trade-off between consumption : The Law of Large Numbers explains why it is unlikely that the actuarially fair premium for an insurance policy will be the same for a small start up firm as it will be for a large employer such as a university. Depending on assistance from family and..

What is the difference in the equivalent uniform annual cost : Machine A was purchased three years ago for $10,000 and had an estimated market value of $1,500 at the end of its 10-year life. Annual operating costs are $1,250. The machine will perform satisfactorily for the next seven years. what is the differenc..

Determine the after-tax equivalent present worth : A certain engine lathe can be purchased for $270,000 and depreciated over three years to a zero salvage value with the SL method. This machine will produce metal parts that will generate revenues of $180,000 (time zero dollars) per year. Determine th..

Assume the demand for plastic surgery is price inelastic : Assume the demand for plastic surgery is price inelastic. When the price of plastic surgery increases, the number of operations decreases. The percentage change in the price of plastic surgery is less than the percentage change in quantity demanded. ..

Explain any insights you gained from doing the comparison : Compare one similarity and one difference among each agency that you selected in terms of their responsibilities, jurisdiction, and authority. Be specific and provide examples. Explain any insights you gained from doing the comparison

Representatives passed legislation to increase minimum wage : Recently, the House of Representatives passed legislation to increase the minimum wage in the nation from $5.15 to $7.50. What are the pros and cons of this proposal? Provide an analysis based on the demand and supply of labor.

User Account

All Pages