3. Compare the two projects by using modified B/C ratio method to decide if they should be done or not. (i= 10% per year). POINT:25 Project 1 Capital cost 1400,000 Annual maintenance cost 50,000 Annual benefits 275,000 28,000 4 Annual disbenefits Life, years Project 2 550,000 48,000 350,000 35,000 2 4. A company is proposed three different production lines. Production line A involves the purchase of a machine for 8,000$ by 6 years life and 1,800 $ salvage value at that time. It is included additional cost of 0,5$ per unit of product produced per year. The plan of production line B involves the purchase of a machine for 10,000$ with same life span of production line A with 3,500 salvage value at that time and additional cost of 0,32$ per unit of product produced per year. It is planned to purchase a machine for 7,600 $ for production line C with 2,000 salvage value when disposed of in 7 years and additional cost of 0,26$ per unit of product produced per year. For what range of annual production volume values is each method preferred? (i = 10%) (Break even Method). POINT:25 1. For the cash flow below, use an Annual Worth comparison to determine which alternative is the best at an interest rate of 12% per year compounded quarterly; (point;25) A ($) First cost -80,000 B ($) -300,000 C($) -700,000 Maintenance cost per -20,000 -20,000 -13,000 quarter S. V 15,000 60,000 200,000 Life, Years 3 6 00 2. A manager of a company has 4 systems ahead to make decision about them. Company uses a 3-year planning period and MARR is 15%. As a financial engineer offer him the best solution (method: Rate of Return). POINT:25 System Initial AOC Annual SV investment revenue 1 -400,000 -300,000 350,000 50,000 234 -440,000 -250,000 400,000 165,000 -410,000 -225,000 330,000 75,000 -450,000 -150,000 360,000 200,000