ts fixed cost will be $61,000 per year, but its variable cost will be only $10 per unit. Determine the number of units eac the two operations to break even. The number of units each year necessary for the two operations to break even, (in units)
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- The property appraisal district for Marin County has just installed new software to trackresidential market values for property tax computations. The manager wants to know the totalequivalent cost of all future costs incurred when the three county judges agreed to purchasethe software system. If the new system will be used for the indefinite future, find theequivalent value (a) now and (b) for each year hereafter. The system has an installed cost of$2,500,000 and an additional cost of $700,000 at year 8. The annual software maintenancecontract cost is $75,000 for the first 4 years, $100,000 for the second 4 years, $125,000 for thethird 4 years, and $125,000 thereafter. In addition, there is expected to be a recurring majorupgrade cost of $100,000 every 14 years. Assume that i= 7% per year for county funds.An engineer is trying to decide which process to use to reduce sludge volume prior to disposal. Belt filter presses (BFP) will cost $203,000 to buy and $85,000 per year to operate. Belts will be replaced one time per year at a cost of $5500. Centrifuges (Cent) will cost $396,000 to buy and $119,000 per year to operate, but because the centrifuge will produce a thicker “cake”, the sludge hauling cost to the monofill will be $37,000 per year less than for the belt presses. The useful lives are 5 and 10 years for alternatives BFP and Cent, respectively, and the salvage values are assumed to be 10% of the first cost of each process whenever they are closed down or replaced. Use PW evaluation to select the more economical process at an interest rate of 6% per year over (a) the LCM of lives, and (b) a study period of 8 years. Are the decisions the same?An item with a holding cost of $400 per year can be shipped by air in 1 day, costing $250, or by ground in 5 days, costing $150. Assuming the holding costs of $400 per year are based on an operational year of 365 days, which is cheaper and by how much?
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