1. a) A factory has a projected cash flow for a business activity as follows: $ -100,000 $-150,000 $ 150,000 $ 400,000 Year 0 Year 1 Year 2 Year 3 Assuming each cash flow occurs at the end of the year and an interest rate of 8%, what is the annual worth (uniform annual income) of this activity over the 3-year period? b) A factory has two alternatives for manufacturing a certain device: Buy a machine for $2000 which would permit the device to be manufactured for $3.00 per unit. Buy a machine for $20,000 which would permit the device to be manufactured for $1 per unit. Plan 1: Plan 2: Assuming a volume of 3000 devices per year, what is the break even year for these two plans? Ignore discounting.

1. a) A factory has a projected cash flow for a business activity as follows: $ -100,000 $-150,000 $ 150,000 $ 400,000 Year 0 Year 1 Year 2 Year 3 Assuming each cash flow occurs at the end of the year and an interest rate of 8%, what is the annual worth (uniform annual income) of this activity over the 3-year period? b) A factory has two alternatives for manufacturing a certain device: Buy a machine for $2000 which would permit the device to be manufactured for $3.00 per unit. Buy a machine for $20,000 which would permit the device to be manufactured for $1 per unit. Plan 1: Plan 2: Assuming a volume of 3000 devices per year, what is the break even year for these two plans? Ignore discounting.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Just c d and e please
Urgently need
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i = 8% %3| 0 -1-2- 3– 4– 5- 6 $5500 $7100 $9500 -F-