Question

Hello! I need help solving these problems for engineering economy. Please show the full solution and all work for BOTH PROBLEMS. please write neatly and large (the resolution of photos on the site are low). please be as detailed as possible and answer BOTH questions. Thank you

1. Remerowski Corporation Inc. asks you to estimate the cost to purchase a new piece of production equipment. The company purchased this same type of equipment in the past for S10,000. The original equipment had a capacity of 2000 units, while the new equipment has a capacity of 1000 units. The power sizing exponent for this type of equipment is 0.28. in addition, the cost index for this type of equipment was 126 when the original unit was purchased and is now 160, If Remerowiski uses an 8% annual interest rate to evaluate equipment purchases, estimate the cost to purchase the new piece

Answer 1

Monthly payments = $700 seven year loan 1% interest rate down payment = $ 10000 if we calculate the value of loan taken as per monthly payment x(1 + 0.01/12)^^y*12 = 700*7*12 = > x = 54830 x(1.0724) = 700 times 84 and down payment = $ 10000 Total amount of money to be spent on the house = 64830 $ Cost of equipment having capacity of 1000 units = (1000/2000)^^0.028 times $ 10000 = $ 8408.96 Cost of new equipment today = cost of new equipment times (cost index of new piece/cost index of old piece) = $ 8408.96 (126/160) = $ 6622.059