Respuesta :
The question can be solved by the information provided in per part as follows:
a) let R be the revenue for years through 8.
PW = 0 relation.
PW= Revenue – costs
0=50,000(P/F,10%,1) + R(P/A,10,1)+R(P/A,10%,7)(P/F,10,7)(P/F,10%,1) -150,000 + 20,000(P/F,10,1)−150,000+20,000(P/F,10%,8) – 42,000(P/A,10%,8)
[tex]R=
\frac{ - 50,000(0.9091)+150,000−20,000(0.4665)+42,000(5.3349)}{(4.8684)(0.9091)}[/tex]
[tex] = \frac{319,281}{4.4259} [/tex]
= $72,140 per year
b) based on the above calculations, the project is not sensitive to annual operational cost. As used in this paragraph, "annual operating costs" refers to all costs associated with the facility's first-rate office building operations, maintenance, and repairs. Annual running costs must include depreciation for capital investments made to lower operating expenses if the landlord has reasonably determined that the yearly decrease in operating expenses will exceed depreciation. Depreciation on the building or equipment, as well as any income, inheritance, excess profits, capital stock, or franchise taxes owed by the landlord, are not included in the annual operating costs.
Note that the full question is:
The National Potato Cooperative (NPC) is considering the purchase of a deskinning machine that will cost $150,000 and should have a salvage value of $20,000 at the end of its 8-year useful life. The uniform annual savings from using the new machine are expected to be $70,000 per year. However, the uniform annual operating costs are projected to be in the range from $25,000 to $35,000.
a) determine the uniform annual costs for which this project would break even. The NPC has a MARR = 10%.
b) based on your calculations in part (a), explain whether the project is sensitive to the annual operating costs.
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