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A dentist is deciding between two X-ray machines for his new office. Estimated
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# Question : A dentist is deciding between two X-ray machines for his new office. Estimated : 2141716

SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question.

10) A dentist is deciding between two X-ray machines for his new office. Estimated costs for each machine are the following:

 Machine A B Installed cost \$36,000 \$38,000 Annual maintenance cost \$1250 \$950 Market value at year 6 \$5750 \$6250 Life, years 6 6

Which machine should be recommended based on the annual worth method? Use a MARR of 15% and a study period of 6 years.

11) A major bakery-cafe chain is evaluating whether they should consolidate its two offices into one location when the two leases expire. In addition, the company also needs to decide if they want to purchase or lease the new location. The estimated costs for these three alternatives are as follows:

 Alternative Continue Leasing Separate Offices Lease Combined Office Purchase Combined Office Initial costs - - \$270,000 Annual lease \$53,550 \$63,000 - Annual maintenance costs - - \$6000 Lease period 4 12 - Market value at the end of year 12 - - \$216,000

Which alternative should be selected based on the annual worth method? Use a MARR of 11% and a study period of 12 year(s).

12) A manufacturing firm is considering two models of lathes. Model A will have an initial cost of \$29,000, an operating cost of \$2750, and a salvage value of \$6500 after 6 years. Model B will have an initial cost of \$36,500, an operating cost of \$2200, and a \$ 7750 resale value after 12 years. At an interest rate of 10% per year, which model should the consulting firm buy?

## Solution 5 (1 Ratings )

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Economics 1 Year Ago 134 Views