ENGINEERING ECONOMIC A local authority is considering three alternatives access plans. The capital budget willonly allow accepting one of the three alternatives. Financial data for the three plans aregiven in Table 2. The interest is 11%, compounded annually.a)i) Evaluate the three plans based on the present worth method of comparison.ii) Propose your opinion to accept the best plan.Table 2PlanPlan 1Plan 2Plan 3First cost (RM)3,000,000 3,450,000 | 2,500,000Estimated annual Revenue (RM)550,000560,000450,000Estimated salvage value (RM)40,00045,00030,000Useful life111310

In economics, present value refers to the current value of a future stream of cash flow. The net…

A local authority is considering three alternatives access plans. The capital budget will only allow accepting one of the three alternatives. Financial data for the three plans are given in Table 2. The interest is 11%, compounded annually. i) Evaluate the three plans based on the present worth method of comparison. ii) Propose your opinion to accept the best plan. Table 2 Plan Plan 1 Plan 2 Plan 3 First cost (RM) 3,000,000 3,450,000 2,500,000 Estimated annual Revenue (RM) 550,000 560,000 450,000 Estimated salvage value (RM) 40,000 45,000 30,000 Useful life 11 13 10

A local authority is considering three alternatives access plans. The capital budget will only allow accepting one of the three alternatives. Financial data for the three plans are given in Table 2. The interest is 11%, compounded annually. i) Evaluate the three plans based on the present worth method of comparison. ii) Propose your opinion to accept the best plan. Table 2 Plan Plan 1 Plan 2 Plan 3 First cost (RM) 3,000,000 3,450,000 2,500,000 Estimated annual Revenue (RM) 550,000 560,000 450,000 Estimated salvage value (RM) 40,000 45,000 30,000 Useful life 11 13 10

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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