2. Mnvircaneand Partners produces its own electric power. The plant's power capacity exceeds itsown requirements. Mr. ny. Drand Partners has been offered a contract to sell excess power to anearby utility company. Mr. r. Dor and Partners would supply the utility company with 20 000megawatt-hours per year (MWh/a) for 10 years. The contract would specify a price of $22.75per megawatt-hour for the first year of supply, which would rise by 1% per year after this. Thisprice is independent of the rate of inflation over the 10 years.Mrul ice and Partners would incur a first cost to connect its plant to the utility system. Therewould also be operating costs attributable to the contract. Mr. and Partners believes theprice of yearly operating costs would increase over time at the inflation rate. The terms of thecontract and Mr. osrly and Partners' costs are shown in the tables below.Output price in year 1 (S/MWh)Price adjustment (yearly)Power to be supplied (MWh/a)Contract lengthFirst cost now (S)Operating cost in year 1 (S)Current dollar MARRSale of PowerCosts22.751% per year20 00010 years200 000390 00020%(a) Find the present worth of the contract under the assumption that there is no inflation overthe life of the contract.(b) Find the present worth of the contract under four assumptions: inflation is (i) 1 percent peryear, (ii) 2 percent per year, (iii) 3 percent per year, and (iv) 4 percent per year.

NPV is a capital budgeting tool to decide on whether the capital project should be accepted by the…

Answered: 2. Mnvircaneand Partners produces its…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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You are the financial manager of the firm LAB.inc which does research in the medical field, your company needs an estimate of a financing plan for a research project. The research project according to the evaluation of the experts will be spread over a period of 4 years. The annual funding required to conduct this research is $100,000 at the beginning of each year. The firm has set a term of 7 years to raise the necessary funds to finance this research, the nominal interest rate is 8% capitalized quarterly. a. How much does the company need to save at the end of each month to fund this research in 7 years? b. Draw the timeline for this financing plan by presenting all the relevant elements. If the firm wants to start financing the research project today t=0, by taking out a bank loan equal to the VA of all the financing needs of the research project (for the 4 years). c. Calculate the amount of monthly payments that the firm must pay to repay this bank loan for a period of 5 years?
4. in Year Income, $1000 Cost, $1000 MJ Corp produces and sells a new model of photoxaltais. (PV). Annual cash flows are shown table below. Determine the future worth of the net cash flows at an interest of 10% per year. 8 per year. 1 200 90 2 200 90 3 200 90 4 200 90 5 200 90 6 Don't use excel and please don't upload answers that were already posted 200 90 7 200 90 200 Hide Transcribed Text 4. MJ Corp produces and sells a new model of photovaltaic (PV). Annual cash flows are shown in table below. Determine the future worth of the net cash flows at an interest of 10% 90
ENGINEERING ECONOMICS 2. A local firm is establishing a sinking fund for the purpose of accumulating a sufficient capital to retire its outstanding bonds at maturity. The bonds are redeemable in 10 years and their maturity value is P150000. How much should be deposited each year if the fund pays interest at the rate of 3%? Draw a cash flow
2. Two alternatives, a flexible manufacturing cell and fixed automation, have different cost and revenue characteristics as follows: Flexible Cell Fixed Automation Investment S2,500,000 б уears S800,000 in first year; increasing by $100,000 each year thereafter $300,000/year $1,500,000 3 years S800,000/year Life Gross cash savings s100,000 in the first year; decreasing to S80,000 in second year and S70,000 in third year Cash disbursement MARR 20% 20% Assuming "repeatability" and service needed for 6 years, show which alternative is preferred using the method of rate of return.
Subject : Engineering Economics Q 1. At the end of 13 years, how much is a $253 initial deposit worth, assuming an annual interest rate of 07 percent compounded (i) Annually? (ii) Semiannually? (iii) Quarterly? (iv) Monthly (v) continuously?
Assume that someone have to pay tuition for four years. Two years at RCC school and then two years at Northeastern University. Two years at RCC cost $25000 for Two years at Northeastern University $144000 That person then get a fulltime engineering job for $90000/yr. What is that person own simple payback period and his/her ROI for paying for school in order to get that Engineering job?
A UAB graduate donates $500,000 to the School of Engineering to fund student scholarships indefinitely. UAB's investments historically average 8%. UAB decides to delay issuing the scholarships for 5 years to increase the funds available. The additional scholarship funding this delay allows UAB to provide each year compared to the funding available if UAB started providing scholarships immediately is most nearly: O $9000 O $19,000 $40,000 $59,000
Calculate the annual worth uniform series in years 1 through 10 for the following incomes and expenses, If the interest rate is 1596 per year. Expense, S/Year 10,000 2,000 Year Income, S/Y ear 1-6 7,000 7-10 1,000 2,000 Selected Answer: 3 [None Given] Correct Answer: $1,532
Engineering Economics 2-) We have a five-year contract, compounded quarterly, at a rate of 16% per year. $12 million per quarter. What is the present value of the contract?
Your mom wants to invest in a project that costs $10,000 today. It will produce a cashflow of $12,000 at the end of the year. Hshe doesn't invest the funds in this project, she could eam 10% per year on the money in the bank. What is the Present Value (NP) of $12,000 received after a year? 2What is the NPV of the $10,000 investment?
A transit system is considering buying 6 more buses to provide better service. It will cost $100,000 for buying a new bus and $15,000 per year for maintenance and operation for the following 8 years. If the city’s MARR is 8%, what is the equivalent uniform annual cost of this project? Assume the bus has no value at the end of 8 years.
9. Energy costs for green chemical treatment have increased uniformly over the past 5 years. If costs in year 1 are $26,000 and increase by $2,000 per year through year 5, the present value of the costs at 10% per year is: A. $102,900 B. $112,300 C. $122,100 D. $195,800 Please solve based the option max 15 minutes ASAP

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