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.ABCost7000053000Uniform 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

See similar textbooks

Similar questions

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.
Economics A new machine can be purchasedfor$80,000. Its expecteduseful life is 5 years, at which time its market value will be $6,000. Annual revenues less expenses dueto the new machine will be $20,000 per year overthefive-year period. Assume a MARR of 10% to determine if this is a good investment by using. a) the PW method b)the FW method c) the AW method d) The IRR method e) The ERR method
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
cost maintenance life a $3000 $100/year 5 years $250 after 5 year b %14000 $80/year 15 years $600 after 15 year salvage interest= 5% need the best option using present worth and future worth with and without salvage value.
27) For the following alternatives, (a) find the maximum cost you can spend on alternative A to break even with alternative B if the interest rate is 10% per year. (b) repeat A following expected lives, 5, 8, 10, 12, 15 years using Spreadsheet and Goal seek tool.
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.
110 0 Le000 & (0) A 200 B 3000 2000 らoo0 2800 5000 9f MARR=SI. MARR=81. O x & Y ? MARR = 101 Initial Cost Annual benefit 95|120 Sal vage Value 50 150 use bul libe DO Nothinglon) 3. 200 700 6 yean 12yng
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.
M12
Q1/a-A project has the following costs and benefits. What is the payback period? Costs (CU) Benefits (CU) year 0 1 2 0 1400 500 0 300 400 300 in each year 0 3-10 year b-Find the resent worth for a factory that has the cash flow as shown in the figure bellow assuming that 10%. 6000CU/year 0 10000CU 1 Investment (CU) Net cash flow (CU/year) Salvage value (CU) Life (year) 2 5000 CU/year 3 4 5 6 Alternative 1 14000 5000 3000 5 789 Q2: A) A contractor is planning to purchase a new bulldozer that cost (6 *10' CU). Calculate the schedule of depreciation and book value at the end of each year for the bulldozer's useful life (6 years) if you know that the salvage value is (300 000CU). B) Find the Present Worth of a future sum of 25 000CU for the period of (7 years), if the interest rate is 10% for the first three years and 2% per month for the years from 4 to 7? Q3: a company owner wants to choose one of two alternatives shown in the table, if the interest rate was 10% and the cash flow is as…
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
Hh.207.

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

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