Answered: Concept VP of benefits, $ VA of no…

Concept VP of benefits, $ VA of no benefits, $ Initial cost, $ Operation cost and mantenaince by year $ Life of the proyect in years Efective flush 3800,000 45,000 2200,000 300,000 15

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Calculate the B/C ratio for the following cash flow estimates, using a discount rate of 6% per year. Is the project justified?

+
Concept
VP of benefits, $
VA of no benefits, $
Initial cost, $
Operation cost and mantenaince
by year
,$
Life of the proyect in years
Efective flush.
3800,000
45,000
2200,000
300,000
15

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The El Dorado Star is the only newspaper in El Dorado, New Mexico. Certainly, the Star competes with The Wall Street Journal, USA Today, and the New York Times for national news reporting, but the Star offers readers stories of local interest, such as local news, weather, high-school sporting events, and so on. The El Dorado Star faces the revenue and cost schedules shown in the spreadsheet that follows: A template for the spreadsheet is provided in the Course Materials. You may download my template or create your own. Since we are using dollars and cents, be sure to go out two decimal places on your calculations. Add columns to show, respectively, marginal cost (MC), marginal revenue (MR), and total profit. Two firms, Small and Large, compete by price. Each can choose either a low price or a high price. The following payoff table shows the profit (in thousands of dollars) each firm would earn in each of the four possible decision situations: a) Is there a dominant strategy for…
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