The City of Lubbock has decided to buy a new snow removal machine to avert the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The City of Lubbock has decided to buy a new snow removal machine to avert the occasional snowpocalypse. Thus, the city of Lubbock decided to buy a new snow removal machine. The officials can choose between two different machines: 1. The Blizzard has a $70,000.00 first cost, life of 20 years and $8,000.00 salvage value. At the end of 9 years, it will need a major overhaul costing $9,000.00. Annual maintenance and operating costs are $9,000.00. 2. The Snow Mower will cost $50,000.00, has an expected life of 10 years and has no salvage value. The annual maintenance and operating costs are expected to be $12,000.00 Using a 12.00% interest rate, which machine should be chosen? The City of Lubbock has decided to buy a new snow removal machine to avert the occasional snowpocalypse. Thus, the city of Lubbock decided to buy a new snow removal machine. The officials can choose between two different machines: 1. The Blizzard has a $70,000.00 first cost, life of 20 years and $8,000.00 salvage value. At the end of 9 years, it will need a major overhaul costing $9,000.00. Annual maintenance and operating costs are $9,000.00. 2. The Snow Mower will cost $50,000.00, has an expected life of 10 years and has no salvage value. The annual maintenance and operating costs are expected to be $12,000.00 Using a 12.00% interest rate, which machine should be chosen?
Expert Answer:
Answer rating: 100% (QA)
To determine which machine should be chosen we need to calculate the present worth of costs for each ... View the full answer
Related Book For
Foundations of Financial Management
ISBN: 978-1259194078
15th edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen
Posted Date:
Students also viewed these finance questions
-
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
-
Under one particular term structure model: f(1.7)=0.03e-7-) +0.06(1-07-)). Sketch a graph of f(t.T) as a function of T, and derive expressions for B(t,T) and R(1.T).
-
How much is the Capital Gains Tax Due, if any? On March 18, 2021, Nicanor consulted you on the sale of his principal residence located in Recto, Manila last March 15, 2021. The following are the...
-
Historically, investment spending has experienced more extreme upward and downward swings than consumer spending. Why do you think this is so?
-
A long thin solenoid of length l and cross-sectional area A contains N1 closely packed turns of wire. Wrapped tightly around it is an insulated coil of N2 turns, Fig.21-52. Assume all the flux from...
-
Plot the nucleate boiling heat flux for saturated water at atmospheric pressure on a large, horizontal polished copper plate, over the excess temperature range 5C < Te < 30C. Compare your results...
-
McCormick & Company revealed in its annual report that it had changed the estimated useful life of certain capitalized software costs from five to eight years. Discuss the effect of this accounting...
-
Abbey Park was organized on April 1, 2021, by Trudy Crawford. Trudy is a good manager but a poor accountant. From the trial balance prepared by a part-time bookkeeper, Trudy prepared the following...
-
(Related to Checkpoint 8.2) (Computing the standard deviation for an individual investment) James Fromholtz is considering whether to invest in a newly formed investment fund. The fund's investment...
-
Reynolds Printing Company specializes in wedding announcements. Reynolds uses an actual job-order costing system. An actual overhead rate is calculated at the end of each month using actual direct...
-
Problem 1 (10 points) Part II: Short Answer Problems The R&D department of Smart Electronics is investigating the feasibility of a new product development project. The following table provides all...
-
What are the challenges and advantages of implementing lock-free algorithms in multithreaded applications, and how can they improve scalability?
-
How can multithreaded applications be designed to efficiently manage shared resources without compromising data integrity or application stability?
-
A 15.0 kg box is allowed to slide from rest down a ramp that makes an angle of 30.0 o to the horizontal. The coefficient of friction between the box and the ramp is 0.400 and the ramp is 5.00 m long....
-
The management of Advanced Alternative Power Inc. is considering two capital investment projects. The estimated net cash flows from each project are as follows: Year Wind Turbines Biofuel Equipment 1...
-
Two investors each have $25,000 of their own money available to invest. Investor A has formed a portfolio where she has invested $10,000 of her funds in the riskfree security and the remaining funds...
-
What are economic, strategic, and emotional factors that prevent companies from leaving an industry?
-
The company manufactures three products: wooden chairs, tables and dressers. AFC started off as a 'Mom & Pop' shop but has grown rapidly. AFC uses one assembly line to build all three products,...
-
Jack Hammer invests in a stock that will pay dividends of $2.00 at the end of the first year; $2.20 at the end of the second year; and $2.40 at the end of the third year. Also, he believes that at...
-
Mark Ventura has just purchased an annuity to begin payment at the end of 2016 (that is the date of the first payment). Assume it is now the beginning of the year 2014. The annuity is for $8,000 per...
-
Henderson Office Supply is considering a more liberal credit policy to increase sales, but expects that 9 percent of the new accounts will be uncollectible. Collection costs are 6 percent of new...
-
Use Aspen Plus Analysis to develop and print out ternary diagrams for the system water-chloroform-acetone using NRTL as the LLE correlation. Compare results to experimental data in Table 13-A2 (mole...
-
Do Lab 12 in this chapter's appendix, but for three-stage systems. Operation is at \(293 \mathrm{~K}, 1.0 \mathrm{~atm}, \mathrm{~F}=10 \mathrm{kmol} / \mathrm{h}\) and is \(10 \mathrm{~mol} \%\)...
-
Input the DECHEMA coefficients in Aspen Plus from Table 13-A1 in the appendix. Then in Properties, have Aspen print out the triangular diagram for the triethylamine, carbon-tetrachloride, acetic-acid...
Study smarter with the SolutionInn App