the interest factors for discrete compounding when = 15% per year. The maximum p
ID: 2789254 • Letter: T
Question
the interest factors for discrete compounding when = 15% per year.
The maximum price per new bulb the engineer should be willing to pay is $____ ?
A plant engineer wishes to know which of two types of lightbulbs should be used to light a warehouse. The bulbs that are currently used cost $44.60 per bulb and last 14,700 hours before burning out. The new bulb (at $58.2 per bulb) provides the same amount of light and consumes the same amount of energy, but it lasts twice as long. The labor cost to change a bulb is $16.00. The lights are on 20 hours a day, 365 days a year. Assume that the firm's marginal tax rate is 39% if the firm's MARR is 15%, what is the maximum price per bulb the engineer should be willing to pay to switch to the new bulb? Round the service life of the old bulb to the nearest whole number 15%, whant ofExplanation / Answer
Useful life of the old bulb: = 14,700 hrs x (20 hrs x 365 days) 2 Years Useful life of the new bulb = 2years x 2 4 Years Compute the equivalent present worth cost for each option Let X denote the price for the new light bulb. PW(15%) Old Bulb = (1-39%) x [$44.60 + $44.60(P/F(15%,2) $47.78 PW(15%) New Bulb = (1-39%) x [X + $16] Break-even price for the new bulb = .61X + 9.76 = 47.78 $62.32 The maximum price per new bulb the engineer should be willing to pay is $62.32
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.