07 ModelHW7 - Purchase Cost $15,000.00 i(1 0.10 i(2 0.15 n...

Info icon This preview shows pages 1–5. Sign up to view the full content.

View Full Document Right Arrow Icon
Purchase Cost:  $15,000.00  i(1) 0.10 i(2) 0.15 n O&M Costs Market value PW(10%) AE(10%) PW(15%) AE(15%) 1  $2,500.00   $12,000.00   $6,363.55   $6,999.91   $6,738.80   $7,749.62  2  $3,200.00   $8,100.00   $13,223.39   $7,619.19   $13,469.11   $8,285.07  3  $5,300.00   $5,200.00   $19,992.36   $8,039.22   $19,659.27   $8,610.31  4  $6,500.00   $3,500.00   $25,948.12   $8,185.87   $24,793.67   $8,684.36  5  $7,800.00   $-     $33,181.64   $8,753.23   $30,673.13   $9,150.27  Economic life of the machine is 1 year.   for both rates.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
MARR 0.12 n Defender Challenger 1  $(3,200.00)  $(5,800.00) 2  $(2,500.00)  $(4,230.00) 3  $(2,650.00)  $(3,200.00) 4  $(3,300.00)  $(3,500.00) 5  $(4,000.00) 6  $(5,500.00) 0 1 2 3 4 5 6 7 8 Option 1 (J0,4),(J,3),(J,3) J0 J Option 2 (J0,3),(J,3),(J,4) J0 J J Option 3 (J0,2),(J,4),(J,4) J0 J J Option 4 (J0,1),(J,5),(J,4) J0 J J OPTION 1  $18,400.00  OPTION 2  $17,200.00  OPTION 3  $18,100.00  OPTION 4  $21,100.00  Based on the 4 options that I looked at, the best option is #2 (use defender for 3 years, then use challenger for and scrap it and then use the challenger again for the remaining 4 years
Image of page 2
9 10 J J J J r 3 years 
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Project Cost IRR Cum 5  $60,000,000.00  0.90 60 3  $35,000,000.00  0.80 95 2  $25,000,000.00  0.40 120 7  $19,000,000.00  0.32 139 6  $23,000,000.00  0.30 162 1  $15,000,000.00  0.22 177 4  $5,000,000.00 
Image of page 4
Image of page 5
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern