A cost analysis is to be made to determine what, if anything, should be done in a situationoffering three "do-something" and one "do-nothing" alternatives. Estimates of the costsand benefits are as follows:End-of-Uniform Useful-LifeBenefit Salvage (years)ValueUsefulFirstAlternativesCostAnnualLife-$500$135-6001002505-700100180104Use Present Worth Analysis with the Least Common Multiple Method to select the bestalternative. Use MARR=6%. (Note: You MUST describe your answers with conversionfactor notations and you DON'T NEED TO calculate the values of PW for supporting adecision. Simply describe your selection criterion with PW expressions.)1.

The question is based on the concept of capital budgeting and techniques of capital budgeting. The…

Answered: A cost analysis is to be made to…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Compare two alternatives, 1 and 2, on the basis of a present worth evaluation using 10% per year and a study period of 8 years. Alternative First Cost Annual Operating Cost Overhaul in Year 4 Salvage Value Life Answer to the nearest whole dollars for currency, and the nearest percentage (no decimals) for interest, and a whole number for the number of years. Do NOT enter commas. DO enter minus signs for negative values. 1) What is the Present Worth of Project 1? $ 1 2 ($13,000) ($49,000) ($6,000) ($5,000) $0 ($3,350) $1,800 $6,800 4 years 8 years
0 ave servie if for 20 years with o savage value, Which equipment should be the rate of retum is 10 % and all equipment shown in the following table. slected using the incrementa bencfitcostanalysis
Based on estimates the data for 2 types of bridges with different lives are as follows. If the minimum attractive rate of return is 9%, determine which project is more desirable using Annual Cost Method & Rate of Return Method. Timber Bridge Steel Bridge First Cost Salvage Value Life in yrs Annual maintenance 500k 20k 12 60k 1.4M 100k 36 25k
solve, dont use excel. dont write the answer in a paper becuse of the handwriting. thanks
Two alternatives are being considered: B First cost Uniform annual benefit Useful life, in 5000 9600 1750 1850 4 8 years If the minimum attractive rate of return is 7%, which alternative should be selected? Solution: 1. Use the increment analysis, we should use 2. Terms n= 3. The Increment CFD has 3 basic patterns: O AP= O AA= O AF= occurred at end of year 4. AROR= % 5. Choose Please answer all parts of the question.
Data for 2 alternatives are given below, determine the cost of alternative B so that the two alternatives will be equally desirable. Assume an interest rate of 15%. Use benefit cost ratio analysis Alternatives A Cost Salvage Value Annual Benefit Life (years) B P100k X 10k 16k 28k 30k 10 12
Answer according to the question please
9) Two alternatives are being considered. The best estimates for the various consequences are as follows: $2500 300 Cost $1500 Net annual benefit 200 End-of-useful-life salvage value |Useful life, in years If interest is 3 %, which alternative has the better net present worth (NPW)? 200 500 10 10
Please do not give solution in image format thanku
Find the expected EUAW from the financial data provided in the table for new equipment. Because of the uncertainty of technology being used in this equipment, it has not been possible to get the initial cost accurately. The annual benefit, however, is estimated to be $25,000 with a possible equipment life of 5 years. The salvage value is expected to be 10% of the initial cost. MARR = 8%. First Cost, $ $60,000 $80,000 $100,000 $120,000 Probability 0.25 0.35 0.30 0.10 Choices: A. $3957 B. $2977 C. $4628 D. $5157 Determine the associated risk measure in this equipment investmest in terms of standard deviation. A. $6,123 B. $4437.80 C. $8,523 D. $4,923
Not use Excel
Determine which alternative, if any, should be chosen based on Annual Worth method using 15% MARR. Use Repeatability Method. Note: Show final answer to the nearest WHOLE NUMBER and show complete solution Answer the following: a. The Annual Worth of Alternative A is = $ Blank 1 b. The Annual Worth of Alternative B is = $ Blank 2 c. Choose Alternative (Type only A or B) = Blank 3

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