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Question: has failed in a facility that will be completely replaced...

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has failed in a facility that will be completely replaced in three yeas brassoud last more 1. A pump installed will last three years. However, a used replaced in three years. A brass pump costing than three years has been sitting in the maintenance shop for a year. The pump cost $13,000 stainless steel pump that should last more when it was new. The accountants say the pump is now worth $7000. The maintenance that it willcost an extra S500 to reconfigure says is) for $4000. the pump for the new use and he could sell it used as What is the book cost of the stainless steel pump? b) What is the opportunity cost of the stainless steel pump? c) How much cheaper or more expensive would it be to use the stainless steel pump rather than a new brass pump. 2 A city needs to increase its rubbish disposal facilities. There is a choice of two areas, as follows. Area A: A gravel pit with a capacity of 16 million cubic metres. Owing to the possibility of high ground water, however, the provincial environment ministry has restricted the lower 2 million cubic metres of fill to inert material only (earth, concrete, asphalt, paving, brick, etc...). The inert material principally clean earth, must be purchased and hauled to this area for the bottom fill Area B: Capacity is 14 million cubic metres. The entire capacity may be used for general rubbish disposal. This area will require an average increase in a round-trip haul of 8 km for 60% of the city and a decreased haul of 3 km for 20% of the city. For the remaining 20% of the city, the haul is the same distance as for Area A Assume the following conditions: Cost of inert material placed in Area A will be $2.35/m2. Average speed of trucks from last pickup to disposal site is 25 kilometres per hour. The rubbish truck and a two-man crew will cost $35 per hour Truck capacity of 4.5 tons per load or 20 m Sufficient cover material is available at all areas; however, inert material for the bottom fill in Area A must be hauled in. Which of the sites do you recommend? 3. Jim Jones, a motel owner, noticed that just down the street the Motel 36 advertises a $36-per- every day by night room rental rate on its sign. As a result, this competitor has rented all 80 rooms late afternoon. Jim, on the other hand, does not advertise his rate, which is $54 per night, and he averages only a 68% occupancy of his 50 rooms. There are a lot of other motels nearby, but only Motel 36 advertises its rate on its sign. (Rates at the other motels vary from $48 to $80 per night.) Jim estimates that his actual incremental cost per night for each room rented, rather than remaining vacant, is $12. This $12 pays for all the cleaning. laundering, maintenance, utilities, and so on. Jim believes his eight alternatives are Resulting Occupancy Rate (%) Alternative Advertise and Charge (S/ night)
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