Breakeven percent reduction in labor hours for new system

Assignment Help Business Economics

Reference no: EM13743905

A large city in the mid-West needs to acquire a street-cleaning machine to keep its roads looking nice year round. A used cleaning vehicle will cost $85,000 and have a $20,000 market (salvage) value at the end of its five-year life. A new system with advanced features will cost $150,000 and have a $40,000 market value at the end of its five-year life. The new system is expected to reduce labor hours compared with the used system. Current street-cleaning activity requires the used system to operate 8 hours per day for 20 days per month. Labor costs $50 per hour (including fringe benefits), and MARR is 12% per year. (11.2)

a. Find the breakeven percent reduction in labor hours for the new system.

b. If the new system is expected to be able to reduce labor hours by 17% compared with the used system, which machine should the city purchase?

Reference no: EM13743905

Questions Cloud

Determinants of trade flows-financing international trade : "Determinants of Trade Flows and Financing International Trade" Please respond to the following:

Population screening for genetic disease : Complete a writing assignment that addresses Winthrop's Natural Science General Education objectives: Population screening for genetic disease

Design an object hierarchy : Design an object hierarchy and design your own UML class diagram to reflect the classes and relationship required by your program.

Explain joaquín is an epic poem written by chicano activist : Explain Joaquín is an epic poem written by Chicano activist.

Breakeven percent reduction in labor hours for new system : A large city in the mid-West needs to acquire a street-cleaning machine to keep its roads looking nice year round. A used cleaning vehicle will cost $85,000 and have a $20,000 market (salvage) value at the end of its five-year life.

How use of popular media affect nations historical narrative : how can the use of popular media affect a nation's historical narrative? Can it be used for good? Evil? Or as a tool to educate?

Costs of production and market-structure characteristics : Given the costs of production and market-structure characteristics, analyze how the dem functions under (a) perfect completion and (b) imperfect competition. They will each drive a different approach for maximizing profit and allocation of resources.

Assumptions of the theory of comparative advantage : All of the following are assumptions of the theory of comparative advantage, except

Basic three sector model and instead of assuming : If we modify our basic three sector model and instead of assuming that taxes are autonomous or fixed in amount (the Tx = Txo assumption) now assume that taxes are a positive function of income, will this modification have the effect of increasing, de..

User Account

All Pages