Problem 3) Bio-Tech Engineering is considering buying a machine vision system fo

Question

Problem 3) Bio-Tech Engineering is considering buying a machine vision system for an inspection procedure. Cash flows for two different alternatives available are listed in the table below. If MARR is 8% for the company, calculate the incremental NPW. Show all steps Data Initial Cost Maintenance Cost/Tear Benefits/ Year Salvage Value Life, Years Alpha Vision $20000 $2800 $4000 $2000 Beta Vision $30000 $2000 $6500 $5000 Problem 4) Financial data related to the three different alternatives are provided in the table below. Assume that the alternatives are replaced at the end of their useful lives. MARR = 8%. List the EUAC and EUAB for each alternative. What is the best alternative? Initial Cost Uniform Annual Benefits Salvage Value Useful life (yrs) $5000 $650 $5000 20 $1000 $0 $1760 5 $2500 $350 $2000 10

Explanation / Answer

ALPHA VISION YEAR Annual Benefits Annual Cost maintenance Salvage value Annual inflow PV Factor @8% Present value 1 4000 2800 1200 0.926 1111.11 2 4000 2800 1200 0.857 1028.81 3 4000 2800 1200 0.794 952.60 4 4000 2800 1200 0.735 882.04 5 4000 2800 1200 0.681 816.70 6 4000 2800 1200 0.630 756.20 7 4000 2800 1200 0.583 700.19 8 4000 2800 1200 0.540 648.32 8 2000 2000 0.540 1080.00 Present value of Cash inflow 7975.97 Less: Present value of cash outflow 20000.00 Net Present Worth -12024.03 BETA VISION YEAR Annual Benefits Annual Cost maintenance Salvage value Annual inflow PV Factor @8% Present value 1 6500 2000 4500 0.926 4166.67 2 6500 2000 4500 0.857 3858.02 3 6500 2000 4500 0.794 3572.25 4 6500 2000 4500 0.735 3307.63 5 6500 2000 4500 0.681 3062.62 6 6500 2000 4500 0.630 2835.76 7 6500 2000 4500 0.583 2625.71 8 6500 2000 4500 0.540 2431.21 8 5000 5000 0.540 2700.00 Present value of Cash inflow 28559.88 Less: Present value of cash outflow 30000.00 Net Present Worth -1440.12

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.