1. The example in the previous chapter, National Homebuilders, Inc. evaluated cut-and-finishequipment from vendor A (6-year life) and vendor B (9-year life). The PW analysis used theLCM of 18 years. Consider only the vendor A option now. The cash diagram shows the cashflows for all three life cycles (first cost $-15,000; annual M&O costs $-3500; salvage value$1000). Demonstrate the equivalence at i= 15% of PW over three life cycles and AW overone cycle. In previous example, present worth for vendor A was calculated as PW = $-45,036.cost (A) incomeyearnet cash flow0-150000-150001-35000-35002-35000-35003-35000-35004-35000-35005-35000-35006-185001000-175007-35000-35008-35000-35009-35000-350010-35000-350011-35000-350012-185001000-1750013-35000-350014-35000-350015-35000-350016-35000-350017-35000-350018-35001000-2500($45,036.36) annual W($7,349.32)

The objective of this question is to demonstrate the equivalence of Present Worth (PW) over three…

Answered: 1. The example in the previous chapter,…

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

Standby power for pumps at water distribution booster stations can be provided by either gasoline-or diesel-powered engines. The costs for the gasoline engines are as follows: Gasoline First cost, $ Annual M&O, $ per year Salvage value, $ Life, years - 150,000 -41,000 23,000 15 The incremental PW cash flow equation associated with (diesel – gasoline) is 0 = -40,000 + 11,000 (P/A, i, 15) + 16,000(P/F, i, 15) Determine the following: (a) First cost of the diesel engines (b) Annual M&O cost of the diesel engines (c) Salvage value of the diesel engines
6
Please provide steps by step answer with proper calculation and explanation with final answer.....
I need help only with the second part of inputting this data into excel calculating the Annual Worth for both options. Then using Goal Seek to find out the new salvage value that will equal AW equations, thank you.
A consulting engineering firm is considering two models of SUVs for the company principals. A GM model will have a first cost of $36,000, an operating cost of $4000, and a salvage value of $15,000 after 3 years. A Ford model will have a first cost of $32,000, an operating cost of $3100, and also have a $15,000 resale value, but after 4 years. (a) At an interest rate of 15% per year, which model should the consulting firm buy? Conduct an annual worth analysis. (b) What are the PW values for each vehicle?
Compare the alternatives C and D on the basis of a present worth analysis using an interest rate of 15.00% per year and a study period of 10 years. (Include a minus sign if necessary.) Alternative First Cost AOC, per Year Annual Increase in Operating Cost, per Year Salvage Value Life, Years The present worth of alternative C is $ с $-50000 $-8000 $-1500 $14000 10 $-21000 $-9000 $-200 $1500 5 and that of alternative D is $
! Required information An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has an estimated first cost of $40,000, an annual operating cost (AOC) of $12,000, and a service life of 2 years. Method B will cost $70,000 to buy and will have an AOC of $6,000 over its 4-year service life. Method C costs $125,000 initially with an AOC of $3,500 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth 7% of its first cost. Perform a present worth analysis to select the method at /= 12% per year. The present worth of method A is $ The present worth of method B is $ The present worth of method C is $ ✓is selected. Method C
Wall’s Pharmacy will have to sell a new product that has an estimated revenue of $5,100 per month and costs of $1,000 per month with an initial purchase of $28,000. How long will Wall's Pharmacy have to sell a new product if the MARR is 3% per month? Wall's Pharmacy will have to sell a new product for __ months.
Compare three mutually exclusive alternatives on the basis of their capitalized costs at i =10% per year. Alternative |First cost, $ AOC, $/year Salvage value, $| Life, years B2 300,000 |-10,000 |70,000 A1 -50,000 C3 |-30,000 5,000 2 900,000| 3,000 |200,000
not use ai please
Pls answer it manually and show a complete solution
Required information An electric switch manufacturing company is trying to decide between three different assembly methods. Method A has an estimated first cost of $38,000, an annual operating cost (AOC) of $10,000, and a service life of 2 years. Method B will cost $79,000 to buy and will have an AOC of $3,000 over its 4-year service life. Method C costs $143,000 initially with an AOC of $3,000 over its 8-year life. Methods A and B will have no salvage value, but Method C will have equipment worth 6% of its first cost. Perform a future worth analysis to select the method at i= 13% per year. The future worth of method A is $55118 The future worth of method B is $ The future worth of method C is $ Method B is selected.

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