A start up business is considering two types of equipment - data are as follows: TYPE A TYPE B First Cost P200,0p0.00 P300,000.00 Annual operating cost 32,000.00 24,000.00 Annual labor cost 50,000.00 32,000.00 Insurance and property taxes 3% 3% Payroll taxes 4% 4% Estimated life 10 10 The minimum required rate of return is 15%. Using present worth cost method, determine the value of alternative A and alternative B:

A start up business is considering two types of equipment - data are as follows: TYPE A TYPE B First Cost P200,0p0.00 P300,000.00 Annual operating cost 32,000.00 24,000.00 Annual labor cost 50,000.00 32,000.00 Insurance and property taxes 3% 3% Payroll taxes 4% 4% Estimated life 10 10 The minimum required rate of return is 15%. Using present worth cost method, determine the value of alternative A and alternative B:

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

5
The General Hospital is evaluating new office equipment offered by four companies. The useful life of the equipment is 5 years. First cost Maintenance and operating cost (annual) Annual benefit Salvage value Company A Company B Company C Company D $15,000 $18,000 $25,000 $20,000 1,600 1,100 30 55 20 40 7500 3,000 9,000 3,500 400 13,000 6,000 The internal rate of return for Company A is close to (%) 900 11,000 4,500
2. Two alternatives, a flexible manufacturing cell and fixed automation, have different cost and revenue characteristics as follows: Flexible Cell Fixed Automation Investment S2,500,000 б уears S800,000 in first year; increasing by $100,000 each year thereafter $300,000/year $1,500,000 3 years S800,000/year Life Gross cash savings s100,000 in the first year; decreasing to S80,000 in second year and S70,000 in third year Cash disbursement MARR 20% 20% Assuming "repeatability" and service needed for 6 years, show which alternative is preferred using the method of rate of return.
Please no written by hand and no emage
For the project with cash flow given below find the most sensitive factor among annual benefit, annual cost and salvage value if the changes by ±20%. Initial investment Annual revenue Annual Cost Salvage Value MARR Life in years Project Rs.2,00,000 Rs.1,00,000 Rs. 40,000 Rs. 50,000 10% 5
Hand written plzzzzz....asap plzzzzzz solve 30 minutes plz,,,, hand written plzzzzzzzx
A cutting-edge product of Continental Fan had the following net cash flow series during its first 5-year period on the market. Find all rate of return values between 0% and 100%. (Round the final answer to three decimal places.) Year 0 1 2 3 45 5 The rate of return is %. Net Cash Flow, $ -54,000 37,000 29,000 10,000 -5,000 13,000
please dont provide answer in image format thank you
Q.1 Find the capitalised cost of an investment at 15% interest rate. The investment has initial cost $200000 and operating annual cost is $40000 for life time.