replacement of equipment, Chemical Engineering

Assignment Help:
A company is using a piece of equipment which originally cost $30,000. The equipment has been in use for 5 years, and now has a net realizable value of $6000. At the time of installation, the service life was estimated to be 10 years and zero salvage value at the end .Operating costs amount to $22,000/year. At the present time, the remaining service life of the equipment to be 3 years.
A proposal has been made to replace the present piece of property by one more advanced design. The proposed equipment would cost $ 40,000, and the operating costs would be $ 15,000 per year. The service life is estimated to be 10 years with a zero salvage value. Each piece of equipment will perform the same service and all costs other than those for operation and depreciation will remain constant. The company requires an annual return of at least 10 percent. Should the present equipment be replaced? (straight line depreciation is applicable)

Related Discussions:- replacement of equipment

Bubble cap tray and counter flow tray, a. Describe the problems of flooding...

a. Describe the problems of flooding and channelling in packed tower b. Describe the construction and working of sieve tray, bubble cap tray and counter flow tray c. Describe

Look, nerve cell reproduces

nerve cell reproduces

Explain ion implantation, Ion implantation equipment typically having of a...

Ion implantation equipment typically having of an ion source, where ions of the desired element are produced, an accelerator, where the ions are electrostatically accelerated to a

Polymeric Liquids, Application of polymeric liquids in water distribution s...

Application of polymeric liquids in water distribution system

Water treatment, concequence of sludge and slag formation in boiler

concequence of sludge and slag formation in boiler

Catalysis, Auto catalysis & induced catalysis

Auto catalysis & induced catalysis

Different types of polarization mechanisms in dielectrics, Explain the diff...

Explain the different types of polarization mechanisms in dielectrics. There are essentially four basic kinds of polarization mechanisms: Interface polarization: Electron

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd