1. A company is confronting an energy efficiency problem in which they are experiencing a quite high loss of energy, currently estimated to be worth $70,000 annually. Two alternatives are available to address the problem. Choice A would reduce the loss by 55% and cost $120,000 to implement. Choice B would reduce the loss by 40% and cost $85,000 to implement. Cost of money is 8%. Which alternative would be chosen under each of the following scenarios:
1. Anticipated life of 3 years.
2. Anticipated life of 10 years.
3. What is the break even time for the two choices.
2. Find the economic life, with interest rate 12%, of an asset. Initial cost is $5,500. Operation cost is $1,200 per year. Salvage value decreases 15% of new value per year. Maintenance cost is $350 in the first year and increases by $50 per year each year following.
3. The cost of producing and selling a certain item is: $200.x+$20,000 for the first 2,000 units. (x is the number of units produced.) For larger numbers produced the cost of production is $170.(x-2000)+$420,000. If the sale price (each) is $320-$0.04.x find the number which should be produced to maximise profit.
Download:- Maxwell_SysEng.xlsx