A project has a life of 10 years and no salvage value. Your firm uses anMARR of 8% to evaluate projects. The project has uncertain costs andrevenue as shown in the table below:NetInitial Cost ProbabilityProbabilityRevenue$110,000 0.25$30,000 0.15$240,000 0.60$44,0000.55$330,000 0.15$54,0000.30Determine the risk for the project expressed as the standard deviation ofthe expected value of the EUAW. Express your answer in $ to the nearest$100.

The project has three different scenarios, each with a probability and an associated initial cost…

Answered: A project has a life of 10 years and no…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1) The sensitivity graph of a project is presented below: 70 60 Present Worth ('000 $) 50 40 30 SV 20 10 MARR -20% -15% -10% -5% C) FC D) VC E) O&M Base Deviation What is the most sensitive input of the project? A) MARR B) SV O&M FC VC 0% 5% 10% 15% 20%
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A project with uncertainty is under consideration for implementation. The values are shown in the table below. Calculate the Expected Value of the Net Present Worth of this project. n Proba FC Annual Benefit ProbaB 7% ($100,500) ($100,500) ($100,500) ($100,500) ($100,500) ($100,500) $50,000 $22,000 $37,000 $20,000 $5,000 $95,000 8 23% 43% 55% 35% 7% 8. 35% 7% 8 21% 7% 7% 7% 27% 65% 10 75% 10 85% 10 10% 5%
IC OM B D Life/years X OY OZ OW OV Y $420,000 $45,000 $110,000 $20,000 10 Z $540,000 $35,000 $260,000 $45,000 20 W V $500,000 $200,000 $50,000 $20,000 $80,000 $180,000 $10,000 $30,000 10 20 $250,000 $40,000 $90,000 $10,000 15 based on the above ME alternatives and using the B/C analysis, which alternative we should select?i=10%. X
20 O It costs a pharmaceutical company $35,000 to produce a 1000-pound batch of a drug. The average yield from a batch is unknown but the best case is 90% yield (that is, 900 pounds of good drug will be produced), the most likely case is 85% yield, and the worst case is 70% yield. The annual demand for the drug is unknown, with the best case being 22,000 pounds, the most likely case 18,000 pounds, and the worst case 12.000 pounds. The drug sells for $60 per pound and leftover amounts of the drug can be sold for $8 per pound. To maximize annual expected profit, how many batches of the drug should the company produce? You can assume that it will produce the batches only once, before demand for the drug is known. You should consider a range of batches between 13 and 22.
The annual profit from an investment is $20,000 each year for 5 years and the cost of investment is $80,000 with a salvage value of $50,000. The discount rate (cost of capital) at this risk level is 12%. Based on the given information, the net present value of the investment = $ 20,467 (round your response to the nearest whole number).
Management Kdan Cloud main-2-11 2 A= Outlines Q Search R Share Tool TT Ov Comment & Markup ►Functions of two variables Solutions 195% + T Annotation FAX OCR Q Editor OCR Convert Fax Search ii. Add a contour plot for the profit function and use this to estimate the maximum profit that the company can realize with this budget and the corresponding production amounts. iii. Now find the exact values for the production amounts and the maximum profit by compu- tation. 19. A firm produces two product: ⚫ a niche product with inverse demand function given by p₁ = 100-291, and • a standard product with fixed price of 2 monetary units, so p2 = 2. The variable production cost for the niche product is 5 monetary units per unit of production; for the standard product it is 1 monetary unit per unit of production. There is a fixed production cost of 100. (a) Find the equation of the revenue function R (91,92), as well as its domain. (b) Show on a graph which production amounts for the two products…
300 +A 250 200 150 100 (intel CORE IS 50- 06. The Average Total Cost (AC) reaches a minimum at O (a) Q=6 O (b) Q=10 0 Q 0 2 4 6 8 10 12 14 16 18 20 (c) Q=12 O (d) Q=15 # TC Type here to search TVC St TFC 30 25 20 15 10 5 Click Save and Submit to save and submit. Click Save All Answers to save all answers. SA 0 0 2 4 6 8 10 12 14 16 18 20 Save All Answers MC AC AVC AFC (? Save and Submit DELL
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McBurger Inc., wants to redesign its kitchen to improve productivity and quality. Three designs,called B1, B2, and B3, are under consideration. No matter which design is used, daily demandfor sandwiches at a typical McBurger restaurant is 500 sandwiches. A sandwich costs 500 baizato produce. Non-defective sandwich sell, on average, for 1 OR per sandwich. Defective sandwichcannot be sold and are scrapped. The goal is to chose a design that maximizes the expected profitat a typical restaurant over a period of one year (365 days). Designs B1, B2, and B3 cost 40,0003OR, 50,000 OR, and 70,000 OR, respectively. Under design B1, there is 0.8 chance that 90 outof each 100 sandwiches are non-defective and 0.2 chance that 70 out of each 100 sandwiches arenon-defective. Under design B2, there is 0.85 chance that 90 out of each 100 sandwiches are nondefective and 0.15 chance that 75 out of each 100 sandwiches are non-defective. Under design B3,there is 0.9 chance that 95 out of each 100 sandwiches…

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