Alpha Electronics can purchase a needed service for ($90) per unit. The same service can be provided

Question:

Alpha Electronics can purchase a needed service for \($90\) per unit. The same service can be provided by equipment that costs \($100\),000 and that will have a salvage value of 0 at the end of 10 years. Annual operating costs for the equipment will be \($7\),000 per year plus \($25\) per unit produced. MARR is 12 percent/year.

a. Based on a present worth analysis, should the equipment be purchased if the expected production is 200 units/ year?

b. Based on a present worth analysis, should the equipment be purchased if the expected demand is 500 units/ year?

c. Determine the breakeven value for annual production that will return MARR on the investment in the new equipment.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Principles Of Engineering Economic Analysis

ISBN: 9781118163832

6th Edition

Authors: John A. White, Kenneth E. Case, David B. Pratt

Question Posted: