2. Three mutually exclusive earth-moving pieces of equipment are being considered for severallarge building projects in India over the next five years. The estimated cash flows for eachalternative are given below. The construction company's MARR is 15% per year. Which of thethree alternatives, if any, should be adopted? State your main assumptions.Capital investmentNet annual revenueSalvage valueUseful lifeCaterpillar$22,000$7,000Deere$26,200$9,500Case$17,000$5,200$4,000$5,000$3,5004 years3 years5 years

The objective of the question is to determine which of the three earth-moving equipment alternatives…

Answered: 2. Three mutually exclusive…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A major equipment purchase is being considered by Metro Atlanta. The initial cost is determined to be $1,000,000. It is estimated that this new equipment will save $100,000 the first year and increase gradually by $50,000 every year for the next 6 years. MARR=10% a. Using Benefit- Cost analysis, what is the Benefit/Cost ratio for this equipment purchase? b. Based on the Benefit/Cost analysis should Metro Atlanta purchase the equipment?
Solve this problem using the incremental Benefit - Cost ration with, expected life of 10 years and rate of return of 10% Alternative A Initial cost Annual maintenance cost Estimated annual benefit $50,000 $4,000 $10,000 Alternative B Initial cost $30,000 Annual maintenance cost $3,000 Estimated annual benefit $9,000 a. Select A with B/C =1.14 b. Select B with B/C 1.14 OC. Select B with B/C = 0.14 O d. Reject A with B/C = 1.14
Can you compute the PW of alternative A, the AW of alternative B, the FW of Alternative C, and the PW of alternative D? Also for a MARR of 12%, rank the MEAs from most profitable to least profitable. HINT: You will need to perform additional calculations before answering this question.
The Philippine Institute of Industrial Engineers (PIIE) is planning to put up its own building. Two proposals being considered are: A: The construction of the building now to cost Php 400,000 B: The construction of a smaller building now to cost Php 300,000 and at the end of 5 years to be added to cost Php 120,000 By how much is proposal A more economical than proposalB if interest is to be neglected? Answer is Php Blank 1
The MARR is 15%. Three alternatives are available and the associated cash flow is as follow: Year First Cost A B C $1,700 $2,100 $3,750 Annual Benefit Useful Life 2 $1,000 $1,000 $1,000 3 6 Answer the following in this format: 1.23 1. The payback period for Alternative A is 2. The payback period for Alternative B is 3. The payback period for Alternative C is Based on Payback period analysis, Alternative should be selected. (Enter only the letter)
PROBLEM #7: Three alternatives to incorporate improved techniques to manufacture Vertical Axis Wind Turbine have been developed and costed. Compare the alternatives below using capitalized cost and an interest rate of 12% per 4,55 and determine the best alternative among the following: First Alternative Second Alternative Third Alternative First Cost Php. 2,000.000 Php 3,000,000 Php 10,000,000 Net income per quarter Php. 300.000 Php 100,000 Php 400,000 Salvage value Php. 50.000 Php 70,000 N/A Life years 4 8 00
-Two alternatives are shown in the table below. If the MARR is 20%, which alte mative should be selected and why? Remember to show your work!) (Estimated Rasponse Times for Awarage Student: 7 minutes) Year C C Altemative A $3.000) $1,200 $1,300 $1,300 Alemative B $1.500 $1.500 $1,500 a. Choose Altemative B because the incremental rate of retum is 18.22%, which is less than the MARR, therefore the more expensive aftemative should be selected b. Choose Altemative B because it has an IRR of 11.25% where as Alternative A only has an IRR of 9.70% c. Choose Altemative A because the incremental rate of retum is 1.54%, which is less than the MARR, therefore the cheaper alternative should be selected d. Choose Altemative A because the incremental rate of retum is 18.22%, which is less than the MARR, therefore the cheaper altemative should be selected e. Choose Altemative B because the incremental rate of retum is 1.54%, which is less than the MARR, therefore the more expensive altemative should…
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Q4. The cash flow details of a public project is as follows = BD 250000 Initial cost /investment Annual benefits/revenues = BD 120000 Worth of annual cost Salvage value Interest rate per year 8% and useful lie 30 Years Use the three project evaluation methods( PW, FW, AW) = BD 12,000 = BD 150000
answer asap with diagrams
Two mutually exculsive alternative are being considered for the environmental protection equipment at a petroleum refinary. one of these alternatives must be selected. The estimated cash flow for each alternatives are as follows. Use MARR of 10% Note: Do not round in between solutions and round up to 2 decimal places for final asnwer. A. Which alternative is preferred, based on the repeatability assumptions? Use AW method.
Most likely estimates for a project are as follows. Choose the correct choice below. MARR Useful life Initial investment Receipts-Expenses (R-E) Determine whether the statement "This project (based upon the most likely estimates) is profitable." is true or false Click the icon to view the relationship between the PW and the percent change in parameter Click the icon to view the interest and annuity table for discrete compounding when the MARR is 15% per year. O False O True 15% per year 6 years $6,500 $1,800/year am

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