Академический Документы
Профессиональный Документы
Культура Документы
Life, years 10 5 0
Annual costs:
Depreciation:
Machine:
300,000−20,000
d=
(1+0.1)10 −1
0.1
d=17,568.71
Operation 32,000
Maintenance 5,000
Grande (Henan)
Annual costs:
Depreciation:
Machine:
69,161.69
d=
(1+0.1)5−1
0.1
d=11,328.51
Operation 22,500
Maintenance 8,000
75,440.80
Rate of return on additional investment x 100%
230,838.31
=32.68%>10%
Annual costs:
Depreciation:
Machine:
300,000−20,000
d= 10
(1+0.1) −1
0.1
d=17,568.71
Operation 32,000
Maintenance 5,000
Grande (Henan)
Annual costs:
Depreciation:
Machine:
69,161.69
d=
(1+0.1)5−1
0.1
d=11,328.51
Operation 22,500
Maintenance 8,000
Since annual cost of ginger washer machine is greater than that of the annual cost of Grande
(Henan) machine, grande (Henan) is more economical.
BY THE PRESENT WORTH COST METHOD
Use 10-year study period, which is the least common multiple of 10 and 5.
20,000
0 1 2 3 4 5 10
300,000 300,000
PWC= 300,000 + 133,000(P/A, 10%, 10) + 280,000(P/F, 10%, 10) -20,000 (P/F, 10%, 10)
=300,000+817,227.43 +107,952.12-7,710.87
=1,217,468.68
Grande (Henan)
Annual Cost=22,500+25,000+8,000+8,299.4=63,799.40
0 1 2 3 4 5 10
PWC = 69,161.69+ 63,799.40(P/A, 10%, 10) + 69,161.69 (P/F, 10%, 5) +69,161.69 (P/F, 10%, 10)
=69,161.69+392,019.69+42,943.97+26,664.83
=530,790.18
Grande (Henan) should be chosen, since its PWC is lesser than PWC of Ginger Washer Machine
20,000
0 1 2 10
0 1 2 1
0
= 48,823.62+133,000-1,254.91
=180,568.71
Grande (Henan)
0 1 2 5
0 1 2 5
0 1 2 1
63,799.40 63,799.40 63,799.40 EUAC EUAC
EUAC 0EUAC
EUAC EUAC
69,161.69
= 18,244.68+63,799.40
=82,044.08
Grande (Henan) should be chosen, since EUAC of Grande (Henan) machine is less than the EUAC
of ginger washer machine.