Pixonix Case
Essay by mineyksl • December 12, 2017 • Course Note • 434 Words (2 Pages) • 965 Views
IE 342
Spring 2010
HW3
Due to: 13.April.2012, 17:00
By: Figen EREN-Ahmet Reha BOTSALI
Q1) A constructionengineer has been asked to recomment an excavator for acquisition. Three alternatives have been identified, having the characteristics shown in the following table. (MARR =12%)
Excavator Alternative | Useful life | Investment | Annual operation cost | Terminal salvage value |
A | 4 years | $15,500 | $8,750 | $2,500 |
B | 5 years | $20,250 | $5,850 | $3,000 |
C | 6 years | $30,750 | $3,175 | $3,250 |
- Apply present worth analysis.
- Use shortest life to establish the planning horizon’s length and apply present woth analysis again.
- Use longest life to establish the planning horizon’s length and apply present woth analysis once more.
- Repeat PW analysis for 10 years standard analysis period.
- Consider an infinitely long planning period and calculate the annual worth for each investment alternatives.
Q2) To automatically insert components in printed circuit boards for a cell phone prduction line, a $500,000 surface mount placement (SMP) machine is evaluated by a manufacturing engineer at Motorola. Over the 10-year planning horizon, it is estimated that the SMP machine will produce annual after tax cost savings of $92,500. The engineer estimates the machine will be $50,000 at the end of 10-year period. Based on the firm’s 10% after tax MARR, should the investment be made?
Q3) A new highway is to be constructed, and asphalt paving will be used. The asphalt will cost $150 per foot, including the material and the paving operation. Due to the heavy usage expected, the asphalt is expected to last 5 years before requiring resurfacing. It is anticipated that the cost of resurfacing will remain the same per foot. Concrete drainage ditches will be installed to each side of the highway; they will each cost $7.75 per foot to install. Ditches will have to be replaced every 15 years; the cost of replacing them will also be $7.75 per foot. Four pipe culverts will be installed every mile; each culvert will cost $8,000 and will last 10 years; replacement culverts will cost $10,000 each, indefinately. Annual maintanance of the highway will cost $9,000 per mile. Cleaning each culvert will cost $1,250 per year. Cleaning and maintaining each ditch will cost $3.75 per foot per year. Determine the capitalized cost (CC) per mile of highway using a MARR of 5%.
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