2. 4.2 Calculate the value of X that makes the two alternatives equally desirable if theMARR is 9%. Hint: the two alternatives' NPV should be the same.ABCost70000 53000Uniform Annual Benefit3200XSalvage Value2670016600Useful Life, in years87

The objective of the question is to find the value of X (Uniform Annual Benefit for Alternative B)…

Answered: 2. 4.2 Calculate the value of X 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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8- The life of a project is 10 years. An equipment is needed for this project. Two alternatives are available. Equipment A has an initial cost of $5000.00, an annual maintenance cost of $300.00, and a salvage value of $800.00 after 5 years. Equipment B has an initial cost of $7000.00, an annual maintenance cost of $400.00, lasts for 10 years and has no salvage value. If the interest rate is 6%: a) Equipment A should be purchased. b) Equipment B should be purchased. c) No equipment should be purchased. d) There is no difference in choosing between A or B.
Mr Dela Cruz is going to buy a new machine for manufacturing its product: Machine A has a first cost of P50,000; annual maintenance P6,000; life 12 years and salvage value of P2,000. Machine B has a first cost of P140,000; annual maintenance P2,500, life 36 years and salvage value P10,000. Money is worth 9% .Compute the annual cost of machine B choices: A. P551 B. P2,500 C. P15,651 D. P7,550 COMPELETE SOLUTION
Littrell's Nursery needs a new irrigation system. System one will cost $145,000, have annual maintenance costs of $10,000, and need an overhaul at the end of year six costing $30,000. System two will have first year maintenance costs of $5,000 with increases of $500 each year thereafter. System two would not require an overhaul. Both systems will have no salvage value after 12 years. If Littrell's cost of capital is 4%, using annual worth analysis determine the maximum Littrell's should be willing to pay for system two.
Al Noor Construction Company is considering two types of tower cranes. The cash flow for the two types are shown below: Model Purchase Cost Annual Operation Cost Annual Revenue Salvage Value Useful Life A $10 000 $1.000 $4.000 0 5 Years B $15 000 $800 3.300 5000 10 Years The MARR is 12%. Based on Future Worth (FW) and Annual Worth (AW) of analysis, which type of crane, should be selected? Also draw the cash flow diagrams.
Sit Consider the following three alternatives. There is also a "do nothing" alternative. At the end of the 5-year useful life of A, a replacement is not made. If a 10-year analysis period and a 2% interest rate are selected, which is the preferred alternative? A B $50 $40 $30 4.5 Cost Net annual bene fit Useful life, in years 12 5 10 10
2. 4.2 Calculate the value of X that makes the two alternatives equally desirable if the MARR is 9%. Hint: the two alternatives' NPV should be the same. A B Cost 70000 53000 Uniform Annual Benefit 3200 X Salvage Value 26700 16600 Useful Life, in years 8 7
Hh.207.
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2. 4.2 Calculate the value of X that makes the two alternatives equally desirable if the MARR is 9%. Hint: the two alternatives' NPV should be the same. A B Cost 70000 53000 Uniform Annual Benefit 3200 X Salvage Value 26700 16600 Useful Life, in years 8 7