The Palm Tree Caf is considering to buy a new Coffee blending machine. Since there are...
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The Palm Tree Café is considering to buy a new Coffee blending machine. Since there are many offerings, the manager asks for your professional opinions. (Round off your final answers to 2 decimal places) (a) Which Engineering Economics Principles can be applied in this problem? Give 3 principles and their reasons. + (6 marks)e A relative of the manager suggests her an offer of a well-known brand: Pricing at $300,000, it would generate an income of (S90,000+10*4) annually. The offer includes the first-year maintenance service free of charge. So, the first annual maintenance service charge of S30,000 would be payable at the beginning of the second year. Its life span can last for 6 years. The salvage value would be ($3,000+4). * (b) Draw a cash flow diagram for the offer.e (5 marks) (c) If the MARR is 10%, should this offer be chosen? Why? The Palm Tree Café is considering to buy a new Coffee blending machine. Since there are many offerings, the manager asks for your professional opinions. (Round off your final answers to 2 decimal places) (a) Which Engineering Economics Principles can be applied in this problem? Give 3 principles and their reasons. + (6 marks)e A relative of the manager suggests her an offer of a well-known brand: Pricing at $300,000, it would generate an income of (S90,000+10*4) annually. The offer includes the first-year maintenance service free of charge. So, the first annual maintenance service charge of S30,000 would be payable at the beginning of the second year. Its life span can last for 6 years. The salvage value would be ($3,000+4). * (b) Draw a cash flow diagram for the offer.e (5 marks) (c) If the MARR is 10%, should this offer be chosen? Why?
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Cash flow at beginning of second year is same as ca... View the full answer
Related Book For
Foundations of Finance The Logic and Practice of Financial Management
ISBN: 978-0132994873
8th edition
Authors: Arthur J. Keown, John D. Martin, J. William Petty
Posted Date:
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