If I have a improvement in time with a creation of application (VBA program) to

Question

If I have a improvement in time with a creation of application (VBA program) to calculate a parameters of an equipment, how can I do an Annual Worth(AW), Present Worth (PW) and Replacement Analysis? what factors should I to take in consideration, if I replace an operation that actually y doing by hand by a computer application.

for example: the worker doing the mathematical operation by hand in 32 seconds, and with the computer application, the operation is doing in 16 seconds with a 50 % of improvement. (theoretic - experimental)/theoretical *100% is the used formula for the 50%

How can I to lead it in $, PW, AW and Replacement Analysis?

Explanation / Answer

Solution:

Note that An alternative to Present Worth (PW) and Future Worth (FW) analysis is Annual Worth (AW) analysis.

Annual worth analysis will select the same projects that would be selected by PW or FW analysis.

The relationship between AW, PW and FW is:

AW = PW(A/P,i,n) = FW(A/F,i,n)

where n is the number of years in the planning horizon or LCM used to obtain PW or FW.

lets take an example

Earlier PW analysis for different-life alternatives:

Service Example: You are evaluating the purchase of a new or used cars that needs to last you for 10 years. i = 8%.

New Car Used Car

Purchase Price $20,000 $10,000

Annual Maint. $750 $1,000

Resale Value $4,000 $4,000

Life, years    10    5

PW (LCM 10) -$23,180 -$18,941

AW(New) = -$20,000(A/P,8%,10) - $750 + $4000(A/F,8%,10) = -$3454.48

AW(Used) = -$10,000(A/P,8%,5) - $1000 + $4000(A/F,8%,5) = -$2822.76

That is how you can solve the problem as you mentioned in form of example

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

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