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Order the answer to: Harry, owner of an automobile battery distributorship in Atlanta

Academic Help business economics Order the answer to: Harry, owner of an automobile battery distributorship in Atlanta

Order the answer to: Harry, owner of an automobile battery distributorship in Atlanta

Question Harry, owner of an automobile battery distributorship in Atlanta, Georgia, performed an economic analysis 3 years ago when he decided to place surge protectors in-line for all is major pieces of testing equipment. The estimates used and the annual worth analysis at MARR = 15% are summarized below. Two different manufacturersâ€™ protectors were compared. The spreadsheet in Figure is the one Harry used to make the decision. Lloydâ€™s was the clear choice due to its substantially larger AW value. The Lloydâ€™s protectors were installed. During a quick review this last year (year 3 of operation), it was obvious that the maintenance costs and repair savings have not followed (and will not follow) the estimates made 3 years ago. In fact, the maintenance contract cost (which includes quarterly inspection) is going from \$300 to \$1200 per year next year and will then increase 10% per year for the next 10 years. Also, the repair savings for the last 3 years were \$35,000, \$32,000, and \$28,000, as best as Harry can determine. He believes savings will decrease by \$2000 per year hereafter. Finally, these 3-year-old protectors are worth nothing on the market now, so the salvage in 7 years is zero, not \$3000. 1. Plot a graph of the newly estimated maintenance costs and repair savings projections, assuming the protectors last for 7 more years. 2. With these new estimates, what is the recalculated AW for the Lloydâ€™s protectors? Use the old first cost and maintenance cost estimates for the first 3 years. If these estimates had been made 3 years ago, would Lloydâ€™s still have been the economic choice? 3. How has the capital recovery amount changed for the Lloydâ€™s protectors with these newestimates? business economics
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