Question

6.8 Eight years ago, Ohio Valley Trucking purchased a large-capacity dump truck for $115,000 to provide short-haul earthmoving services. The company sold it today for $45,000. Operating and maintenance costs averaged $10,500 per year. A complete overhaul at the end of year 4 cost an extra $3600. Calculate the annual cost of the truck at 8% per year interest. 6.12 Humana Hospital Corporation installed a new MRI machine at a cost of $750,000 this year in its medical professional clinic in Cedar Park. This state-of-the- art system is expected to be used for 5 years and then sold for $75,000. Humana uses a return requirement of 24% per year for all of its medical diagnostic equipment. As a bioengineering student currently serving a coop semester on the management staff of Humana Corporation in Louisville, Kentucky, you are asked to determine the minimum revenue required each year to realize the expected recovery and return. Also, you are asked to draw two cash fl ow diagrams, one showing the MRI purchase and sale cash fl ow and a second depicting the required capital recovery each year. 6.14 Nissan’s all-electric car, the Leaf, has a base price of $32,780 in the United States, but it is eligible for a $7500 federal tax credit. A consulting engineering company wants to evaluate the purchase or lease of one of the vehicles for use by its employees traveling to job sites in the local area. The cost for leasing the vehicle will be $4200 per year (payable at the end of each year) after an initialization charge of $2500 paid now. If the company purchases the vehicle, it will also purchase a home charging station for $2200 that will be partially offset by a 50% tax credit. If the company expects to be able to sell the car and charging station for 40% of the base price of the car alone at the end of 3 years, should the company purchase or lease the car? Use an interest rate of 10% per year and annual worth analysis. 6.27 A new bridge across the Allegheny River in Pittsburgh is expected to be permanent and will have an initial cost of $30 million. This bridge must be resurfaced every 5 years at a cost of $1 million. The annual inspection and operating costs are estimated to be $50,000. Determine its equivalent annual worth at an interest rate of 10% per year.

          6.8 Eight years ago, Ohio Valley Trucking purchased a large-capacity dump truck for $115,000 to provide short-haul earthmoving services. The company sold it today for $45,000. Operating and maintenance costs averaged $10,500 per year. A complete overhaul at the end of year 4 cost an extra $3600. Calculate the annual cost of the truck at 8% per year interest.

6.12 Humana Hospital Corporation installed a new MRI machine at a cost of $750,000 this year in its medical professional clinic in Cedar Park. This state-of-the- art system is expected to be used for 5 years and then sold for $75,000. Humana uses a return requirement of 24% per year for all of its medical diagnostic equipment. As a bioengineering student currently serving a coop semester on the management staff of Humana Corporation in Louisville, Kentucky, you are asked to determine the minimum revenue required each year to realize the expected recovery and return. Also, you are asked to draw two cash fl ow diagrams, one showing the MRI purchase and sale cash fl ow and a second depicting the required capital recovery each year.

6.14 Nissan’s all-electric car, the Leaf, has a base price of $32,780 in the United States, but it is eligible for a $7500 federal tax credit. A consulting engineering company wants to evaluate the purchase or lease of one of the vehicles for use by its employees traveling to job sites in the local area. The cost for leasing the vehicle will be $4200 per year (payable at the end of each year) after an initialization charge of $2500 paid now. If the company purchases the vehicle, it will also purchase a home charging station for $2200 that will be partially offset by a 50% tax credit. If the company expects to be able to sell the car and charging station for 40% of the base price of the car alone at the end of 3 years, should the company purchase or lease the car? Use an interest rate of 10% per year and annual worth analysis.

6.27 A new bridge across the Allegheny River in Pittsburgh is expected to be permanent and will have an initial cost of $30 million. This bridge must be resurfaced every 5 years at a cost of $1 million. The annual inspection and operating costs are estimated to be $50,000. Determine its equivalent annual worth at an interest rate of 10% per year.

6.8 Eight years ago, Ohio Valley Trucking purchased a large-capacity dump truck for 115,000 to provide short-haul earthmoving services. The company sold it today for45,000. Operating and maintenance costs averaged 10,500 per year. A complete overhaul at the end of year 4 cost an extra3600. Calculate the annual cost of the truck at 8% per year interest.

6.12 Humana Hospital Corporation installed a new MRI machine at a cost of 750,000 this year in its medical professional clinic in Cedar Park. This state-of-the- art system is expected to be used for 5 years and then sold for75,000. Humana uses a return requirement of 24% per year for all of its medical diagnostic equipment. As a bioengineering student currently serving a coop semester on the management staff of Humana Corporation in Louisville, Kentucky, you are asked to determine the minimum revenue required each year to realize the expected recovery and return. Also, you are asked to draw two cash fl ow diagrams, one showing the MRI purchase and sale cash fl ow and a second depicting the required capital recovery each year.

6.14 Nissan’s all-electric car, the Leaf, has a base price of 32,780 in the United States, but it is eligible for a7500 federal tax credit. A consulting engineering company wants to evaluate the purchase or lease of one of the vehicles for use by its employees traveling to job sites in the local area. The cost for leasing the vehicle will be 4200 per year (payable at the end of each year) after an initialization charge of2500 paid now. If the company purchases the vehicle, it will also purchase a home charging station for 2200 that will be partially offset by a 50% tax credit. If the company expects to be able to sell the car and charging station for 40% of the base price of the car alone at the end of 3 years, should the company purchase or lease the car? Use an interest rate of 10% per year and annual worth analysis.

6.27 A new bridge across the Allegheny River in Pittsburgh is expected to be permanent and will have an initial cost of30 million. This bridge must be resurfaced every 5 years at a cost of 1 million. The annual inspection and operating costs are estimated to be50,000. Determine its equivalent annual worth at an interest rate of 10% per year.

Added by Xavier R.

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