Equipment that was purchased by Newport Corpo­ration for making pneumatic vibration isolators cost $90,000 two years ago. It has a market value that can be described by the relation $90,000 ? 8000k, where k is the years from time of purchase. The operating cost for the first 5 years is $65,000 per year, after which it increases by $6300 per year. The asset’s sal­vage value was originally estimated to be $7000 after a predicted 10-year useful life. Determine the values of P, S, and AOC if (a) a replacement study is done now and it is assumed that the equipment will be kept a maximum of only 1 more year, and (b) a replacement study is done 1 year from now and it is assumed that the equipment will be kept a maxi­mum of only 1 more year after that.

What will be an ideal response?


(a) P = 90,000 – 8000(2) = $74,000
S = 90,000 – 8000(3) = $66,000
AOC = $65,000

(b) P = 90,000 – 8000(3) = $66,000
S = 90,000 – 8000(4) = $58,000
AOC = $65,000

Trades & Technology

You might also like to view...

The following characterize the large intestine in dogs and cats:

A. It is relatively long B. Its principle nutrition-related role is the absorption of water and salts C. It contains high concentrations of bacteria D. All of the above E. B and C above

Trades & Technology

Much like lawyers supporting unlimited damages awarded by juries, lawyers also support TRLs

Indicate whether the statement is true or false

Trades & Technology

The component(s) on a diesel-powered tractor that compresses air for the engine is the _____

a. air cleaner b. turbocharger c. distributor d. injector(s)

Trades & Technology

Where permitted, a plumber should always make which type of hole in a structural member?

A. round, jagged B. square, jagged C. rectangular, smooth D. round, smooth

Trades & Technology