12% per year.For the cash flows shown, use an annual worth comparison and an interest rate ofFirst cost, $Annual cost$, per yearOverhaul cost every 5 years,$Salvage value, $Life, yearsXY-100,000 -250,000-40,000 -30,00002,00030,00010,000510Z-500,000-10,0005,000∞a) Determine the alternative that is economically best.b) Determine the first cost required for each of the two alternatives not selected in part a) so that

The annual worth (AW) value for an alternative will be inclusive of the two components: capital…

12% per year. For the cash flows shown, use an annual worth comparison and an interest rate of First cost, $ Annual cost$, per year Overhaul cost every 5 years, $ Salvage value, $ Life, years X -100,000 -40,000 0 10,000 5 Y -250,000 -30,000 2,000 30,000 10 Z -500,000 -10,000 5,000 ∞ a) Determine the alternative that is economically best. b) Determine the first cost required for each of the two alternatives not selected in part a) so that

12% per year. For the cash flows shown, use an annual worth comparison and an interest rate of First cost, $ Annual cost$, per year Overhaul cost every 5 years, $ Salvage value, $ Life, years X -100,000 -40,000 0 10,000 5 Y -250,000 -30,000 2,000 30,000 10 Z -500,000 -10,000 5,000 ∞ a) Determine the alternative that is economically best. b) Determine the first cost required for each of the two alternatives not selected in part a) so that

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

12% per year.
For the cash flows shown, use an annual worth comparison and an interest rate of
First cost, $
Annual cost$, per year
Overhaul cost every 5 years,$
Salvage value, $
Life, years
X
Y
-100,000 -250,000
-40,000 -30,000
0
2,000
30,000
10,000
5
10
Z
-500,000
-10,000
5,000
∞
a) Determine the alternative that is economically best.
b) Determine the first cost required for each of the two alternatives not selected in part a) so that

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