Question: solve these problems:- In our progressive example, B&T Enterprises is considering the replacement of a 2-year-old kiln with a new one to meet emerging market
solve these problems:-





In our progressive example, B&T Enterprises is considering the replacement of a 2-year-old kiln with a new one to meet emerging market needs. When the current tunnel kiln was pur- chased 2 years ago for $25 million, an ESL study indicated that the minimum cost life was be- tween 3 and 5 years of the expected 8-year life. The analysis was not very conclusive because the total AW cost curve was flat for most years between 2 and 6, indicating insensitivity of the ESL to changing costs. Now, the same type of question arises for the proposed graphite hearth model that costs $38 million new: What are the ESL and the estimated total AW of costs? The Manager of Critical Equipment at B&T estimates that the market value after only 1 year will drop to $25 million and then retain 75% of the previous year's value over the 12-year expected life. Use this market value series and i = 15% per year to illustrate that an ESL analysis and marginal cost analysis result in exactly the same total AW of cost series.The initial cost of a bridge that is expected to be in place forever is $70 million. Maintenance can be done at I-, 2-, 3-, or 4-year intervals, but the longer the interval between servicing, the higher the cost. The costs of servicing are estimated at $83,000, $91,000, $125 000, and $183,000 for intervals of i through 4 years, respectively. What interval should be scheduled for maintenance to minimize the overall equivalent annual cost? The interest rate is 8%% per year. A construction company bought a 180,000 metric ton earth sifter at a cost of $65,000. The company expects to keep the equipment a maximum of 7 years. The operating cost is expected to follow the series described by 40,000 + mojoout, where & is the number of years since it was purchased (t = 1, 2, . . . . 7). The salvage value is estimated to be $30,000 for years I and 2 and $20 000 for years 3 through 7. At an interest rate of 10%% per year, deter- mine the economic service life and the associated equivalent annual cost of the sifter.Nano Technologies intends to use the newest and finest equipment in its labs. Accordingly, a senior engineer has recommended that a 2-year-old piece of precision measurement equipment be replaced immediately. This engineer believes it can be shown that the proposed equipment is economi- cally advantageous at a 10% per year return and a planning horizon of 3 years. (a) Perform the replacement analysis using the annual worth method for a specified 3-year study period. (bj Determine the challenger's capital recovery amount for the 3-year study period and the expected full life. Comment on the effect made by the 3-year study period. Current Proposed Original purchase price, 5 OD'DE- Current market value, $ 17,DO0 Remaining life, years S 15 wimated value in 3 years, $ 9000 20 00 salvage value atber 15 years, $ 5.000 Annual operating cost, $ per year -8.000 -3,000\f\f
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