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3.) The engineer of a medium scale industry was instructed to prepare at least two plans which is to be considered by management for the improvement of their operations. plan "a" calls for an initial investment of P200,000 now with a prospective salvage value of 20% of the first cost 20 years hence. the operation and maintenance disbursement are estimated to be P15,000 a year and taxes will be 2% of first cost. Plan b calls for an immediate investment of P140,000 and a second investment of 160,000 eight years later. the operation and maintenance disbursements will be P9,000 a year for initial installation and P8,000 a year for the second installation. At the end of 20 years the salvage value shall be 20% of the investments. Taxes will be 2% of the first cost. If money is worth 12%, which plan would you recommend?

3.) The engineer of a medium scale industry was instructed to prepare at least two plans which is to be considered by management for the improvement of their operations. plan "a" calls for an initial investment of P200,000 now with a prospective salvage value of 20% of the first cost 20 years hence. the operation and maintenance disbursement are estimated to be P15,000 a year and taxes will be 2% of first cost. Plan b calls for an immediate investment of P140,000 and a second investment of 160,000 eight years later. the operation and maintenance disbursements will be P9,000 a year for initial installation and P8,000 a year for the second installation. At the end of 20 years the salvage value shall be 20% of the investments. Taxes will be 2% of the first cost. If money is worth 12%, which plan would you recommend?

Introduction to Chemical Engineering Thermodynamics
Introduction to Chemical Engineering Thermodynamics
8th Edition
ISBN:9781259696527
Author:J.M. Smith Termodinamica en ingenieria quimica, Hendrick C Van Ness, Michael Abbott, Mark Swihart
Publisher:J.M. Smith Termodinamica en ingenieria quimica, Hendrick C Van Ness, Michael Abbott, Mark Swihart
Chapter1: Introduction
Section: Chapter Questions
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Question and answers are given in the picture. All I need is a solution. Our subject is engineering economics in the subject economic study method
3.) The engineer of a medium scale industry was instructed to prepare at least two plans which is to be considered by management for the improvement of their operations. plan "a" calls for an initial investment of P200,000 now with a prospective salvage value of 20% of the first cost 20 years hence. the operation and maintenance disbursement are estimated to be P15,000 a year and taxes will be 2% of first cost. Plan b calls for an immediate investment of P140,000 and a second investment of 160,000 eight years later. the operation and maintenance disbursements will be P9,000 a year for initial installation and P8,000 a year for the second installation. At the end of 20 years the salvage value shall be 20% of the investments. Taxes will be 2% of the first cost. If money is worth 12%, which plan would you recommend?
Transcribed Image Text:3.) The engineer of a medium scale industry was instructed to prepare at least two plans which is to be considered by management for the improvement of their operations. plan "a" calls for an initial investment of P200,000 now with a prospective salvage value of 20% of the first cost 20 years hence. the operation and maintenance disbursement are estimated to be P15,000 a year and taxes will be 2% of first cost. Plan b calls for an immediate investment of P140,000 and a second investment of 160,000 eight years later. the operation and maintenance disbursements will be P9,000 a year for initial installation and P8,000 a year for the second installation. At the end of 20 years the salvage value shall be 20% of the investments. Taxes will be 2% of the first cost. If money is worth 12%, which plan would you recommend?
3. by Present worth method: Plan A: Annual Cost = P19,000;PW = 337,771 Plan B: Annual Cost = P11,800;PW = 314,564 Plan B is more economical
Transcribed Image Text:3. by Present worth method: Plan A: Annual Cost = P19,000;PW = 337,771 Plan B: Annual Cost = P11,800;PW = 314,564 Plan B is more economical
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