Based on the incremental return shown and thecompany's MARR of 16% per year, the alternativethat should be selected is _____The project initial costs are such that A < C < B.Comparison Rate of Return, %(A-DN)(B-DN)(C-DN)(B-A)(C-A)(B-C)Alternative CDo nothingAlternative BAlternative ACannot be determined.172519141812

The objective of the question is to determine which alternative should be selected based on the…

Answered: Based on the incremental return shown…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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ChemCo Enterprises is the manufacturer of Ultra-Dry, a hydrophobic coating that will waterproofanything. Over a 5 year period, the costs associated with the pilot test product line were as follows: first cost of $43,000 and annual costs of $18,000. Annual revenue was $40,000 and used equipment was salvaged for $4,000. What rate of return did the company make on the product?
The B&E Cooling Technology Company, a maker of automobile air conditioners, faces an impending deadline to phase out the traditional chilling technique, which uses chlorofluorocarbon (CFCs), a family of refrigerant chemicals believed to attack the earth's protective ozone layer. B&E has been pursuing other means of cooling and refrigeration. As a near-term solution, its engineers recommend a cooling technology known as absorption chiller, which uses plain water as a refrigerant and semiconductors that cool down when charged with electricity. The company plans to retrofit the plant now to adopt the absorption chiller and continuing to be a market leader in cooling technology. B&E is considering three options: The financial data for the three options are as follows: Item Initial investment System life Salvage value Annual revenue Annual operations and maintenance costs Option 1 $6 Million 8 years $1 Million $9 Million $6 Million If B&E's MARR is 15% and using equivalent annual worth…
A building project has a present cost of 123,000 JD, an annual cost of 18,000 JD, and a periodic cost of 41,000 JD every 5 years. Use an interest rate of 12% per year to find the capitalized cost of the project.
The three elements namely incremental cash flow series, LCM, and multiple roots-are considered primary reasons that the ROR method is often applied incorrectly in engineering economy analyses of multiple alternatives Select one: True False
Which of the following is not among the measures of worth that are used in engineering economic analysis? Select one: a. payback period b. annual worth c. operations analysis d. future worth
The capitalized cost (CC) of the given project whose Cash Flow diagram is given below is closest to:
A manufacturing company has the choice of two suppliers to buy a piece of equipment from to use in its process. Characteristics of these two suppliers and associated costs are tabulated below. The equipment from supplier A costs more to buy and maintain, but it also has more revenue per unit sold. Selling enough units will at some point make it worth the higher cost. How many units per year must the company sell in order to justify using supplier A (i.e. what is the breakeven number of units to sell)? Use an interest rate of 12% per year. Supplier A Supplier B Initial cost $4,000 $3,000 Sale price (revenue per unit) $4 $3 Transportation costs (per unit) $0 $1.25 Annual maintenance cost $1,400 $1,100 Salvage value $800 $700 Useful life of the equipment (years) 5 4
For each of the following problems, (a) draw the cash flow diagram; (b) present clean and clear manual solutions to the problem; (c) highlight the final answer (only the final answer as required by the problem) by enclosing it within a box. An equipment has a first cost of $200,000, an annual operating cost of $50,000 and a salvage value of 25% of the first cost after 5 years; these estimates being in future dollars. Determine the present worth, assuming an interest rate of 10% and an average inflation rate of 4%.
The capitalized cost (CC) of the given project whose Cash Flow diagram is given below is closest to: = 10% per year 5 6 7 8 9 10 11 2 3 A= $2,000 PO=S30,000 C-55000 (Recurring every 5 y ears) C=55000 (Recurring every 5 years) Captalized Cost= ?
Dexcon Technologies, Inc., is evaluating two alternatives to produce its new plastic filament with low friction properties for creating custom bearings for 3-D printers. The estimates associated with each alternative are shown below. Using a MARR of 16% per year, which alternative has the better present worth and what is that value (select the closest value)? Method First Cost AOC, per Year Salvage Value Life DDM $170,000 $65,000 $4,000 2 years LS $350,000 $40,000 $29,000 4 years DDM with a PW--$473,000 LS with a PW --$445,900 LS with a PW --$222,055 DDM with a PW--$109,300
Give typing answer with explanation and conclusion
The General Hospital is evaluating new office equipment offered by three companies. Cost Annual benefit End of useful life salvage value Useful life (yrs) Select one: 9.5% 8.5% 7.5% Company A $500 $130 $0 10.5% 5 The incremental rate of return between Company B and Company C is close to Company B $600 $115 $250 5 Company C $700 $100 $180 10

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