1) Four mutually exclusive alternatives are being evaluated, and their costs andrevenues are itemized in the table below.Mutually Exclusive AlternativesIVIIIIInvestment (first) costNet annual receiptsless costsSalvage valueUseful life (years)$100,000$152,000$184,000$220,000$15,200$31,900$35,900$41,500$0$15,000$20,000$10,00010101010k If the MARR is X% (please see the table for your value) use the PW method tođetermine which alternatives are economically acceptable and which one should beselected.

Present worth is an equivalence method of analysis in which a project's cash flows are discounted to…

1) Four mutually exclusive alternatives are being evaluated, and their costs and revenues are itemized in the table below. Mutually Exclusive Alternatives IV II III $220,000 Investment (first) cost Net annual receipts $100,000 $152,000 $184,000 $15,200 $31,900 $35,900 $41,500 less costs $20,000 Salvage value Useful life (years) $10,000 $O $15,000 10 10 10 10

1) Four mutually exclusive alternatives are being evaluated, and their costs and revenues are itemized in the table below. Mutually Exclusive Alternatives IV II III $220,000 Investment (first) cost Net annual receipts $100,000 $152,000 $184,000 $15,200 $31,900 $35,900 $41,500 less costs $20,000 Salvage value Useful life (years) $10,000 $O $15,000 10 10 10 10

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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For the following 4 options (one must be chosen), what is the smallest MARR for the "Do Nothing" option to be chosen? Option A Year O Cost ($) Years 1-10 Benefit ($) 5.26% 9.59% 7.09 % 10.69% "Do Nothing" 0 O -1,000 153 B -1,500 207 C -2,000 261
2. Three mutually exclusive design alternatives are being considered. The estimated sales and cost data for each alternative are given on the next page. The MARR is 20% per year. Annual revenues are based on the number of units sold and the selling price. Annual expenses are based on fixed and variable costs. Determine which selection is preferable based on AW. State your assumptions. A в Investment cost Estimated units 60,000 20,000 $50,000 18,000 CLA to be sold/year Unit selling price, $/unit Variable costs, $/unit Annual expenses (fixed) Market value Useful life $4.40 $4.10 $1.00 $1.40 $1.15 $15,000 $30,000 $26,000 $20,000 10 years $15,000 10 years B PUBLICATIO 10 years
2. Two alternatives, a flexible manufacturing cell and fixed automation, have different cost and revenue characteristics as follows: Flexible Cell Fixed Automation Investment S2,500,000 б уears S800,000 in first year; increasing by $100,000 each year thereafter $300,000/year $1,500,000 3 years S800,000/year Life Gross cash savings s100,000 in the first year; decreasing to S80,000 in second year and S70,000 in third year Cash disbursement MARR 20% 20% Assuming "repeatability" and service needed for 6 years, show which alternative is preferred using the method of rate of return.
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Qutestion 3 Solve this problem using the incremental Benefit - Cost ration with, expected life of 10 years and rate of return of 10% Alternative A Initial cost $50,000 Annual maintenance cost $4,000 Estimated annual benefit $15,000 Alternative B Initial cost $30,000 Annual maintenance cost $3,000 Estimated annual benefit $9,000 a. Select B with B/C=1.14 b. Select B with B/C=1.41 c. Select A with B/C=1.14 d. Reject A with B/C=1.14
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Alternative X Alternative Y Capital Investment Useful life $5,000 20 $200 $6,000 15 $800 in year 10 and decreasing by a constant amount of $50 per year Annual Expenses thereafter Salvage Value $1,000 (a) What is the annual worth (AW) of alternative X? Show all the steps of calculation. (4 marks) (b) What is the annual worth (AW) of alternative Y? Show all the steps of calculation. (5 marks) (c) Based on your answers in part (a) and (b), explain which alternative should be selected. (2 marks) LE10 Mec)
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Please do not give solution in image format thanku Two incinerators are being considered by a waste management company. Design A has an initial cost of $2,500,000,has annual operating and maintenance costs of $800,000, and requires overhauls every 5 years at a cost of $1,250,000.Design B is more sophisticated, including computer controls; it has an initial cost of $5,750,000, has annual operatingand maintenance costs of $600,000, and requires overhauls every 10 years at a cost of $3,000,000. Using a 5 percent/year interest rate, determine the capitalized cost for each design and recommend which should be chosen
Subject:eco