Could you please explain in details to let me understand clearly.. thank yo so m
ID: 2806256 • Letter: C
Question
Could you please explain in details to let me understand clearly.. thank yo so much
1) IE department is thinking ofreplacing the current workstation ZM-640 in the lab due to performance problems. ZM-640 was purchased 4 years ago and originally cost 24000 TL. It has a present realizable MV of 24000 TL. A new workstation will require an investment of 37000 TL and is expected to have year-end market values (MV) and annual expenses (AE) as follows End of Year MV, End of Year k (TL) Annual Expenses, E TL) ZM-640 17000 15000 11000 5000 6000 8000 8000 3000 New workstation End ofYeark MV, End of Year k (TL) Annual Expenses, E (TL) 28000 19000 12000 8000 2000 4000 3000 2000 a) Fill the tables below using a before-tax MARR value of 15% per year Challenger (36 Defender (36 End of Year kTCEUAC of Year TCk EUAC 4. b) For how many years should the new workstation be retained in service if purchased? (6 points) c) Due to budget constraint, keeping ZM-640 is also an option. What is the economic life of the current asset? (6 points) d) At the end of which year should the defender be replaced? (16 points)Explanation / Answer
15% a Three method of calculating AW Market value Loss in Value Loss of Int AOC Marginal cost year Disc. Fact Disc. Maginal cost Aw of Marginal Cost A=(Dis.Marginal*10%*(1+10%)^n)/((1+10%)^n-1) A/Dis Fact 0 24,000 0 1 17,000 (7,000) (3,600) -6000 (16,600) 0.86957 -14,434.78 (16,600) (16,600) 2 15,000 (2,000) (2,550) -8000 (12,550) 0.75614 -23,924.39 (14,716) (14,716) 3 11,000 (4,000) (2,250) -8000 (14,250) 0.65752 -33,293.99 (14,582) (14,582) 4 5,000 (6,000) (1,650) -3000 (10,650) 0.57175 -39,383.16 (13,795) (13,795) Market value Loss in Value Loss of Int AOC Mariginal cost year Aw of Marginal Cost 0 37,000 0 Disc fact Total cost 1 28,000 (9,000) (3,700) -11500 (24,200) 0.86957 -21,043.48 (24,200) (24,200) 2 19,000 (9,000) (2,800) -14000 (25,800) 0.75614 -40,551.98 (24,944) (24,944) 3 12,000 (7,000) (1,900) -16500 (25,400) 0.65752 -57,252.90 (25,075) (25,075) 4 8,000 (4,000) (1,200) -19000 (24,200) 0.57175 -71,089.33 (24,900) (24,900) Challenger Defender TCk EUACk TCk EUACk 1 (24,200) (24,200) 1 (16,600) (16,600) 2 (24,944) (24,944) 2 (14,716) (14,716) 3 (25,075) (25,075) 3 (14,582) (14,582) 4 (24,900) (24,900) 4 (13,795) (13,795) b economic life of challenger is 1 year c economic life of defender is 4 year d At the end of 4th year Defender should be replaced