Due to recent business conditions, you will be working from…

Due to recent business conditions, you will be working from home for the foreseeable future.  To replace your daily coffee-shop habit, you decided to purchase a $420 Steamy Perkster – an automated espresso maker and milk frother.  Based on your daily need for a double-shot latte, you estimate that your monthly expenses for coffee beans, milk, and descaler will be about $37.50 per month.  This same drink costs $4 at your local coffee shop, including tip. At an average of 30 drinks each month and an effective interest rate of 2% per month, what is the discounted payback period for this purchase?

A school must purchase new equipment for its chemistry lab….

A school must purchase new equipment for its chemistry lab. Two vendors submitted the following estimates. The salvage values are not expected to change. The school evaluates laboratory equipment purchases over a 4-year study period using a present worth analysis. The annual effective interest rate is 8%. Vendor A Vendor B First cost, $ 19,000 20,900 Annual maintenance & operating costs, $ per year 3,400 1,700 Salvage value 1,900 2,090 Life, years 5 8 What is the present worth of the cash flow for Vendor A that should be used in the analysis?   $ (round to nearest dollar) The net present worth of the cash flows for Vendor B is −$24,990. Based on a present worth analysis, which vendor should the school select, A or B?

A cherry processing facility in Northern Michigan processes…

A cherry processing facility in Northern Michigan processes both sweet and tart cherries for local growers. The facility needs to install a new cherry pitter. An analyst recently obtained the following estimates. Preliminary feasibility study (this year, year 0) $5,000 Purchase & install system (this year, year 0) $250,000 Annual operating costs (years 1-8) $15,000 in year 1, increasing by $3,000 each year Salvage value (year 8) $25,000 Other phase-out activities (year 8) $3,750 The cherry pitter would be used for eight years. The facility uses a before-tax MARR of 8% per year for these types of decisions. (Round to nearest dollar.) What is the capital recovery (CR) cost of the system? $ What is the annual equivalent worth of the operating costs? $ What is the annual equivalent cost of this project? $

Two HVAC systems are being evaluated to improve ventilation…

Two HVAC systems are being evaluated to improve ventilation at a grocery store.  The property manager must choose one of the systems. Use an interest rate of 9% per year and a 7‑year study period. Fuss Monters First cost, $ 116,000 51,000 Annual O&M, $/year 84,000 65,000 Benefits, $/year 220,000 165,000 Disbenefits, $/year 0 50,000 (Round ratios to 2 decimal places) What is the Benefit-Cost ratio for “Fuss?”   What is the Benefit-Cost ratio for “Monters?”   Based on a Benefit-Cost analysis, which system should be selected, Fuss or Monters?