An activated sludge plant of capacity X cost $75 million when it was built in 1995. Thedetailed cost breakdown is given below. Determine a detailed budget estimate of a new similarplant of a capacity 2X in 2020. The capacity factor is 0.86 for this type of plants.Percent oftotal cost5%IndexIndexIndexCost element(1995)60(2013)(2020)116Feasibility study and design servicesLaborMaterialsEquipment including installation costs10030%15020622848%12519017220217%170215

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Answered: An activated sludge plant of capacity X…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Sheridan Mills management is evaluating two alternative heating systems. Costs and projected energy savings are given in the following table. The firm uses 11.50 percent to discount such project cash flows. Year System 100 System 200 0 –$1,982,100 –$1,854,200 1 206,910 763,700 2 429,830 589,800 3 743,040 671,900 4 1,046,900 426,300 What is the NPV of the systems? (Enter negative amounts using negative sign, e.g. -45.25. Do not round discount factors and intermediate calculations. Round final answers to 0 decimal places, e.g. 5,275.)
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You are considering the following project. What is the NPV of the project? WACC of the project: 0.10 Revenue growth rate: 0.05 Tax rate: 0.40 Revenue for year 1: 13,000 Fixed costs for year 1: 3,000 variable costs (% of revenue): 0.30 project life: 3 years Economic life of equipment: 3 years Cost of equipment: 20,000 Salvage value of equipment: 4,000 Initial investment in net working capital: 2,000
Cost estimates for a porposed public facility are being evaluated. Initial construction cost is anticipated to be $120,000 and annual maintenance expenses are expected to be $6500 for the first 20 years and $2000 for every year thereafter. The facility is to be used and maintained for an indefinite period of time. Using an interest rate of 10% per year, the capitalized cost of this facility is most nearly? a. $180,000 b. $190,000 c. $200,000 d. $270,000
Q20. Two roadway designs are under consideration for access to a permanent suspension bridge. Design 1A will cost $3 million to build and $100,000 per year to maintain. Design 1B will cost $3.5 million to build and $40,000 per year to maintain. Both designs are assumed to be permanent. Use an AW-based rate of return equation to determine (a) the breakeven ROR and (b) which design is preferred at an MARR of 10% per year. a) The breakeven ROR is Not attempted %. b) At an MARR of 10% per year, design 1B Correct is preferred.
Consider the relative costs of a timber pedestrian bridge and a steel one; their initial capital costs, annual OMR costs and useful lives are given below: Initial capital cost Annual OMR cost Life span Timber Bridge $500,000 $30,000 15 years Steel Bridge $700,000 $5000 30 years Find the alternative of the least overall costs (use i = 8%). Use both present worth and annual worth methods.
engineering economics
Problem 2. Based on benefit to cost ratio, determine which project should be chosen. Please work out in excel spreadsheet.
Miller management is evaluating two alternative heating systems. Costs and projected energy savings are given in the following table. The firm uses 11.50 percent to discount such project cash flows. Year System 100 System 200 0 –$1,982,100 –$1,854,200 1 206,910 763,700 2 429,830 589,800 3 743,040 671,900 4 1,046,900 426,300 What is the NPV of the systems? (Enter negative amounts using negative sign, e.g. -45.25. Do not round discount factors and intermediate calculations. Round final answers to 0 decimal places, e.g. 5,275.) NPV of system 100 is $ NPV of system 200 is $ Which system should be chosen? Sheridan should choose System 100, System 200, neither, or both

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