analysis, determine which one of the three mutually exclusive alternativ should be selected. Each alternative has a six-year useful life. Assume a 10% MARR. a. Convert cost and salvage to an equivalent series. (Hint: use both to calculate EUAC) b. Determine B/C for each device C. Perform incremental B/C ratio analysis for: i. Device A-Device B ii. Device B-Device C Device A Device B Device C S 560 $ 140 $ 40 First Cost $ 340 $ 100 $ 120 $ 40 Uniform Annual Benefit Salvage Value

analysis, determine which one of the three mutually exclusive alternativ should be selected. Each alternative has a six-year useful life. Assume a 10% MARR. a. Convert cost and salvage to an equivalent series. (Hint: use both to calculate EUAC) b. Determine B/C for each device C. Perform incremental B/C ratio analysis for: i. Device A-Device B ii. Device B-Device C Device A Device B Device C S 560 $ 140 $ 40 First Cost $ 340 $ 100 $ 120 $ 40 Uniform Annual Benefit Salvage Value

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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Question

2) Using benefit-cost ratio analysis, determine which one of the three mutually exclusive alternatives
should be selected. Each alternative has a six-year useful life. Assume a 10% MARR.
a. Convert cost and salvage to an equivalent series. (Hint: use both to calculate EUAC)
b. Determine B/C for each device
C. Perform incremental B/C ratio analysis for:
i. Device A- Device B
ii. Device B-Device C
Device A
Device B
Device C
$ 560
$ 140
$ 40
First Cost
$ 340
$ 100
$ 0
$ 120
$ 40
Uniform Annual Benefit
Salvage Value

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A firm is considering three mutually exclusive alternatives as part of a production improvement program. The alternatives are as follows: A B C Installed cost $8,000 $12,000 $16,000 Uniform annual benefit 1,600 1,750 2,050 Useful life, in years 10 20 20 For each alternative, the salvage value at the end of useful life is zero. At the end of 10 years, Alt. A could be replaced by another A with identical cost and benefits. (a)Construct a choice table for interest rates from 0% to 100%. (b)The MARR is 12%. If the analysis period is 20 years, which alternative should be selected?
1. Data for two alternatives are given in the table below. Determine the X cost of alternative B so that the two alternatives will be equally desirable. Assume an interest of 11%. Use BCR analysis. ALTERNATIVE A Cost 9500 Salvage value 1000 1600 Annual benefit 2800 3700 Life (years) 12
Rr.3.
Using (incremental) benefit-cost ratio analysis OR (incremental) internal rate of return, determine which of the following three mutually exclusive alternatives should be selected. Each alternative has a 6-year useful life. Assume the MARR is 6%. First Cost Uniform Annual Benefit Salvage Value $560 $140 $40 A $340 $100 0 B $125 $40 0 C
REQUIRED Use the information provided below to answer the following questions: 3.1. Calculate the Payback period for the HMC. 3.2. Calculate the Net Present Value for both the HMC and VMC. 3.3. Calculate the Internal Rate of Return (IRR) for the HMC and VMC. 3.4. Which configuration of the CNC machining centres should SMT purchase, if any? Motivate your answer by referring to the answers obtained in questions 3.3 and 3.4. INFORMATION Southern Manufacturing Tools Limited (SMT) is considering the purchase of a Computer Numerical Control (CNC) machining centre for its operations. Two configurations of the CNC machining centres are available: horizontal CNC machining centre (HMC) and vertical CNC machining centre (VMC). Both the HMC and VMC will require an initial investment of R10 000 000, will have a useful life of 7 years and a residual value of R1 500 000. SMT uses the straight-line method of depreciation. The expected net cash inflows of the VMC are expected to be R2 100 000…
Please answer ASAP if you can please. Thank you! Please Please write expression or formula used Set up expression initially with functional notation (e.g.,(P/F,I,n))
A cost analysis is to be made to determine what, if anything, should be done in a situation offering three "do-something" and one "do-nothing" alternatives. Estimates of the costs and benefits are as follows: End-of- Uniform Useful- Life Benefit Salvage (years) Value Useful First Alternatives Cost Annual Life -$500 $135 -600 100 250 5 -700 100 180 10 4 Use Present Worth Analysis with the Least Common Multiple Method to select the best alternative. Use MARR=6%. (Note: You MUST describe your answers with conversion factor notations and you DON'T NEED TO calculate the values of PW for supporting a decision. Simply describe your selection criterion with PW expressions.) 1.
The following information is for five mutually exclusive alternatives that have 20-year useful lives. The decision maker may choose any one of the options or reject them all. Prepare a choice table.
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Please answer ASAP if you can please. Thank you! Please Please write expression or formula used Set up expression initially with functional notation (e.g.,(P/F,I,n))

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