A contractor is trying to decide whether to by a new machine now or wait 3 years from now. The machine costs $63,000 if purchased now or $81,000 if purchased 3 years from now. At a real MARR of 12% per year and an inflation rate of 4% per year, determine it the company should buy now or later (a) without any adjustment for inflation and (b) with inflation considered.

A contractor is trying to decide whether to by a new machine now or wait 3 years from now. The machine costs $63,000 if purchased now or $81,000 if purchased 3 years from now. At a real MARR of 12% per year and an inflation rate of 4% per year, determine it the company should buy now or later (a) without any adjustment for inflation and (b) with inflation considered.

Fundamentals Of Construction Estimating

4th Edition

ISBN:9781337399395

Author:Pratt, David J.

Publisher:Pratt, David J.

Chapter9: Pricing Construction Equipment

Section: Chapter Questions

Problem 6RQ

See similar textbooks

Similar questions

There are three alternatives for equipment to choose from. The following table shows the available information's: Alternativeo Useful S.V. (1000 Life Book value at the end of 3" year (1000 ID) Income ID) (*1000 ID.) (year) 12000 ID using straight line depreciation 7200 ID using sum-of-the years digits 5800 ID using sinking fund method A 7 2400 6000 3000 8000 C 8 2000 D 4000 You are required to select the most economical alternative from the above three. Make your decision on the basis that interest rate is 15% compounded annually
Q1 1- Find the accumulative amount in a bank by down payment of 500000 ID now and ten equal payments at the end of cach year with 10% as a rate of interest. 2- Find the present worth of a machine with initial cost of 4 MD and 15000 ID as an annual maintenance cost for infinity number of years with 9% as interest rate.
Question 50 At 7.7%, a bridge cost P 210M with a life of 21 years. The bridge must be partially rebuilt at a cost of P 100 M at the end of each 21 years, Calculate the capitalized dost if an annual maintenance of P 510,000 is required. Express your answer in whole number. « < Question 50 of 50 A Click Submit to complete this assessment. Save and Submit acer F11 PrtSc Del Home Pg Up F7 F8 F9 F10 F12 Pause F5 F6 FZ F3 Scr Lk SysRq Break Ins #3 24 % & 4-Backspace 5 € 7 8 W E Y U D F G K ~のエ 6
22. One thousand tickets are sold at $1 each for a color television valued at $350. What is the expected value of the gain if you purchase one ticket? O $0.70 O$0.50 O $0.65 $0.80 ere to search' P. W hp
Quèstion 38 Find the amount at the end of 4 years and 9 months if P3,000 is invested at 979% compounded qualterly, using simple interest for anytime less than a year interest period Express your answer in 2 decimal places. Question 38 of 50 A Moving to another question will save this response acer F7 F8 F9 F10 F11 F12 PrtSc Pause Del Home Scr Lk SysRa Break Ins & * Bac 8 P G K
4- The cash flows have a present value of 0. Compute the value of J, assuming a 6% interest rate. 15 1000 1000 1000 0-1 —3—
Pls. answer ASAP. Provide complete solution. I'll rate , thanks
A contractor estimates that he could finish a project in 15 days if he has 20 men. At the start, he hired 10 men then after 6 days, 10 more men are added. How many days was the project delayed? A. 6 B 5 € 4 D 3 E None of the above
Engineer Layla purchased a dump truck worth P850,000. She added P50,000for the delivery and other expenses. The said equipment is expected to be useful for 10 years. At the end of its life, it will cost x% of the first cost. Using SLM, its book value at year 5 is P517,500. What is the value of x?
Question 1. Answer the following: A. When the price =30000-400(Demand) and the variable cost-$3500 per unit, the value of demand that maximize the profit =......... B. The installation cost of a machine is $6000 with estimated life of 12 years and selvage value of $2000 at the end of the 12th year. What will be the annual depreciation cost in the fourth year (using straight line method)? C. Suppose that the initial cost of a certain operation is $120000 at the beginning of the first year. The expenditures are expected to be ($1000) at the end of the first year, $500 at the end of second year, and to increase by $1000 at the end of each of the next 4 years. The salvage value at the end of the 8th year is $2500. Draw the cash flow diagram. D. The Present worth (PW) of six annual payment of $6000 paid at the end of the each of the six years with interest rate of %12 compounded quarterly is.... E. The Future worth at the end of the 4 years (FW4) of the four $2000 annual payment paid at the…
The owner of the Old Reliable Plumbing and Heating Store has an electricheater for sale. Its current price is $93.95. If the owner gives a 41% discount,he will sell the heater for what he paid for it. What did the owner pay to buythe heater? Round the answer to the nearer whole cent.
A man bought an equipment costing P60,000 payable in 12 quarterly payments each installment payable at the beginning of each period. The rate of interest is 24% compounded quarterly. What is the amount of each payment