Montreal Construction needs to replace one of their heavy machines. They are considering buying either Mach...

 

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Montreal Construction needs to replace one of their heavy machines. They are considering buying either Mach X or Mach Y, which have the following data: Data Life, Years First Cost (FC) Annual Benefit(AB) AB Gradient (ABG) Annual Maintenance &Operating Cost (M&O) M&O Gradient (M&OG) Salvage Value Мach X 8 $255,000 88,000 1,300 34,000 1,100 48,000 Мach Y 6 $222,000 73,000 1,200 18,000 600 42,000 The Accounting Department of Montreal Construction reveals that a loan must be secured to purchase any machine. The loan data are as follows: Data Down Payment (% of FC) Loan Period, Years Annual Loan Payment Мach X 25% 8 $33,208.75 Mach Y 25% $38,229.63 The loan payments will be made annually with 10% interest. Montreal Construction assumes MARR = 12%. Using the Net Present Worth (NPW) analysis, answer the following questions: %3D (50) The analysis period if you are going to use NPW is close to: b) 18 years a) 12 years c) 21 years d) 24 years (51) The interest rate that you are going to use in the calculation is: D12% b) 10% c) 15% d) 25% (52) The NPW for Mach X, using only 8 years cash flow, is close to: b) $61,810 a) $60,105 c) $60,485 ) $62,500 (53) The NPW for Mach Y, using only 6 years cash flow, is close to: a) $40,082 b) $45,506 7c))$41,088 d) $38,350 (54) The NPW for Mach Y, using the analysis period, is close to: b) $70,513 ay $75,286 c) $74,255 d) $71,919 (55) Recommend which machine to purchase: fa)) Mach X b) Mach Y c) Both d) None Montreal Construction needs to replace one of their heavy machines. They are considering buying either Mach X or Mach Y, which have the following data: Data Life, Years First Cost (FC) Annual Benefit(AB) AB Gradient (ABG) Annual Maintenance &Operating Cost (M&O) M&O Gradient (M&OG) Salvage Value Мach X 8 $255,000 88,000 1,300 34,000 1,100 48,000 Мach Y 6 $222,000 73,000 1,200 18,000 600 42,000 The Accounting Department of Montreal Construction reveals that a loan must be secured to purchase any machine. The loan data are as follows: Data Down Payment (% of FC) Loan Period, Years Annual Loan Payment Мach X 25% 8 $33,208.75 Mach Y 25% $38,229.63 The loan payments will be made annually with 10% interest. Montreal Construction assumes MARR = 12%. Using the Net Present Worth (NPW) analysis, answer the following questions: %3D (50) The analysis period if you are going to use NPW is close to: b) 18 years a) 12 years c) 21 years d) 24 years (51) The interest rate that you are going to use in the calculation is: D12% b) 10% c) 15% d) 25% (52) The NPW for Mach X, using only 8 years cash flow, is close to: b) $61,810 a) $60,105 c) $60,485 ) $62,500 (53) The NPW for Mach Y, using only 6 years cash flow, is close to: a) $40,082 b) $45,506 7c))$41,088 d) $38,350 (54) The NPW for Mach Y, using the analysis period, is close to: b) $70,513 ay $75,286 c) $74,255 d) $71,919 (55) Recommend which machine to purchase: fa)) Mach X b) Mach Y c) Both d) None