Apply incremental B/C analysis at an interest rate of 8% per year to determine which alternative should be selected. Alternative A Alternative B Initial cost, $ 600,000 300,000 Annual M&O costs, $/year 50,000 40,000 Income, $/year 10,000 8,000 Life, years
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A: * SOLUTION :-
USE INCREMENTAL BENEFIT-COST RATIO ANALYSIS TO GET THUMBS UP
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- In most engineering economy studies, the best alternative is the one which:a. Will last the longest timeb. Is the easiest to implementc. Costs the leastd. Is the most politically correctı need only c and d option1. A pharmaceutical company that manufactures ascorbic acid tablets is investigating two production options that have the estimated cash flows shown ($10 million units). Which one should be selected based on a present worth analysis (in million units) at 10% per year? In- outsourced house Initial Investment -30 Annual cost, $ per year 24 -5 -2 Annual Revenue, $ per 13 year 2 N/A Salvage Value, $ Life
- The value of the future worth for alternative X at an interest rate of 12% per year is closest to: X First cost, $ -15,000 -35,000 Annual operating cost, $ per year -9,000 -7,000 Salvage value, $ 2,000 5,000 Life, years 3 6 Select one: O a. -180,750 O b. -118,908 O c. -98,870 O d. 150,350 YNational homebuilders Inc plans to purchase new rain gutter forming equipment. Two manufacturers offered the following estimates, First Cost, $ Annual Operating Cost, $/year Salvage Value, $ Life, years Vendor A 15,000 3500 1000 6 Vendor B 18,000 3100 2000 9 a. Determine which vendor should be selected on the basis of a PW comparison, if the MARR is 15% per year. b. National Homebuilders has a standard practice of evaluating all options over a 5-year period. If a study period of 5 years is used and the salvage values are not expected to change, which vendor should be selected?List the five main types of engineering economic decisions?
- Question 6 For alternatives shown in the table below and on the basis of their capitalized costs CC and an interest rate of 10% per year. Answer the follc better option: Alternative A First cost, $ Maintenance costs, $ per year Salvage value, $ Periodic costs, $ every 10 years Life, years 31,580 5,000 2,000 282,963 13,000 10,000 10,000 4. CC for alternative A=Interest is a manifestation of what general concept in engineering economy?If you are asked to perform an incremental ROR analysis for the two robots listed below, how would you set them up in an incremental cash flow table? WALL-E EVE First cost, $ -40,000 -35,000 Annual operating cost, S per year -1,500 -2,750 Salvage value, $ Life, years 30,000 5 20,500 O Alternative A: WALL-E Alternative B: EVE O The order does not matter. O Alternative A: EVE Alternative B: WALL-E
- ΔRoR for the first increment (Alt. C-Alt. A) is ___________________. Alt. A Alt. B Alt. C Initial cost $5,000 9,000 7,500 Annual benefits $1,457 2,518 2,133 RoR 14% 12.4% 13% Life in years 5 Group of answer choices 10.12% 11.00 11.85% 9.38%You wish to evaluate four independent projects that all have a 10-year life at MARR = 15% per year. Preliminary estimates for first cost, annual net income, and SV have been made. A B C D First cost, $ −1,200 −2,000 −5,000 −7,000 Annual net income, $/year 200 400 1100 1300 Salvage value, $ 5 6 8 7 (a) Accept or reject each project using a present worth analysis. On your spreadsheet, include the logical IF function to make the accept/ reject decision. (b) The preliminary estimates have changed for projects A and B as shown below. Use the same spreadsheet to reevaluate them. A B First cost, $ −1,000 −2,200 Annual net income, $/year 300 440 Salvage value, $ 8 0There are 5 national projects with infinite life time listed below. Select the best two projects if MARR is 8% per year using rate of return analysis? Project First Cost A 2000 B 1000 C 1500 D 7000 E 5000 ORDER: Annual income 200 130 150 600 260 Calculate i* for each alternative