Engineering Econ HW7 Q1 1. An investment opportunity has an initial cost of $1.8M and a uniform annual benefit of$400,000 over 6 years. Using a MARR of 10%, what is the benefit-cost ratio of thisopportunity? Would you recommend it be pursued? Why or why not?

Answered: 1. An investment opportunity has an…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

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
4. Using benefit-cost ratio analysis, a 10-year useful life, and a 25% MARR, determine which of the following mutually exclusive alternatives should be selected. Cost A B C D E $100 $210 $300 $400 $500 Annual Benefit $37 $60 $83 $137 $150
5 a. What is the payback period (Be exact to 1 decimal place) of the cash flow below? (I am attaching an image for the figure)5 b. A project has the following costs and benefits. What is the payback period (Be exact to 1 decimal place)? Year Cost Benefits0 300001-3 15,000 each year 12,000 each year4 7000 30005-10 11,000 each year
Kiwidale Dairy is considering purchasing a new ice-cream maker. Two models, Smoothie and Creamy, are available and their information is given below. (perform all calculation using 5 significant figures, and give your final answer to 1 decimal place). (a) What is Kiwidale's MARR that makes the two alternatives equivalent? Use a present worth comparison. Creamy First Cost 40,000 Service Life 12 years Annual profit 12,000 Annual operating cost 3,720 Salvage value 5,400 A MARR which makes the two alternatives equivalent in term of PW is Smoothie 15,000 12 years 4,700 1,400 2,250
Tr.21.
A city is planning to renovate their current facility with hi-tech computerized systems. Four plans are proposed by the engineers. Each plan will save $900,000 annually but their cost is different. The benefits will last for 25 years. Based on a benefit-cost analysis what should the agency do, if į = 10%? Initial Cost Annual O & M A $7,000,000 $90,000 Plans B $7,500,000 $120,000 с $6,500,000 $130,000 D $8,000,000 $40,000
A city is planning to renovate their current facility with hi-tech computerized systems. Four plans are proposed by the engineers. Each plan will save $950,000 annually but their cost is different. The benefits will last for 30 years. Based on a benefit-cost analysis what should the agency do, if i = 10%? Initial Cost Annual O & M A $7,250,000 $90,000 B D E F C $6,000,000 $6,500,000 $7,500,000 $8,000,000 $5,500,000 $110,000 $140,000 $80,000 $150,000 $60,000 FOCUS
3. The table below provides cash flows for two mutually exclusive alternatives for developing a “Pay for Recreation" facility being considered by a county government in New Mexico. If money can be borrowed issuing bonds at the rate of 17% per year, using the rate of return analysis, find the attractive alternative between the two given proposals. For this question, use the interpolation between 10% and 20% of interest rates. Year Alt. A Alt. B -20M -40M 1-20 4M 7M 21-40 3M 3M 41-00 2M 4M
A city has developed a plan to provide for future municipal water needs. The plan proposes an aqueduct that passes through 150 meters of tunnel in a nearby mountain. Two alternatives are being considered. The first proposes to build a full-capacity tunnel now for $556 000. The second proposes to build a half capacity tunnel now and a second identical half-capacity tunnel in 20 years. Each of half capacity tunnel costs $402 000. The maintenance cost of the tunnel lining for the full-capacity tunnel is $40 000 every 10 years, and for each half-capacity tunnel it is $32 000 every 10 years. The friction losses in the half-capacity tunnel will be greater than if the full-capacity tunnel were built. The estimated additional pumping costs for each half-capacity tunnel will be $2 000 per year. Using present worth method and a 7% interest rate, which alternative should be selected? Give typing answer with explanation and conclusion
can you answer this? thank you
Consider a project that has been approved by local voters to build a new junior high school, needed because of increased (and projected) population growth. Analyze the project with interest rates of 3, 10, and 15% and with horizons of 15, 30, and 60 years.
Calculate the benefit-to-cost ratio of a project that involves the following cash flow: Initial Cost $500 Uniform $155 (for a total of 15 years) Annual Benefit Assume a 9% interest rate. Group of answer choices 2.9 2.4 0.68 1.2

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS

1. An investment opportunity has an initial cost of $1.8M and a uniform annual benefit of $400,000 over 6 years. Using a MARR of 10%, what is the benefit-cost ratio of this opportunity? Would you recommend it be pursued? Why or why not?