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.
Answer 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?
