SitConsider the following three alternatives. There is also a "do nothing" alternative. At the end ofthe 5-year useful life of A, a replacement is not made. If a 10-year analysis period and a 2%interest rate are selected, which is the preferred alternative?AB$50$40$304.5CostNet annual bene fitUseful life, in years1251010

In economics, present value refers to the current value of a future stream of cash flows. The net…

Answered: Consider the following three…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Two different types of hydraulic equipment are being considered for a certain power plant. Machine A has a first cost of P 12,000, salvage value of P 1,500 at the end of its life of 6 years, and maintenance cost of P 900 annually. machine B has a first cost of P 13,600, no salvage value after 8 years, and annual maintenance of P 700. Money is worth 7%. What is the annual worth of machine A if annual revenue is P 4,200?
For the following 4 options (one must be chosen), what is the smallest MARR for the "Do Nothing" option to be chosen? Option A Year O Cost ($) Years 1-10 Benefit ($) 5.26% 9.59% 7.09 % 10.69% "Do Nothing" 0 O -1,000 153 B -1,500 207 C -2,000 261
Present worth
Economics Two alternative water purification systems are considered to meet the drinking water needs in Canada. The data of the two alternatives are given in the table below. If the interest is 12% compound, which alternative would be appropriate using the annual equivalent (AE) method? System 1 System 2 System 3 initial investment cost -100 -60 -1000 monthly cost -10 -12 -8 maintenance costs -50 Once in two years -30 once in a year No scrap value economic life (years) 10 8 no 4 3 infinity
A machine costs $20,000 and has a 5 years useful life. At the end of 5 years it can be sold for $4000. If the annual interest rate is 8% compounded semiannually, what is the equivalent annual worth (Aw) and the present worth (Pw) of the machine?
Maintenance cost for small bridge with an expected 50 year life are estimated to be $15,000 each year for the first 9 years, followed by a $20,000 expenditure in the year 15 and a $30,000 expenditure in the year 33. If interest rate is at 10% compounded monthly. What is the equivalent present value of the entire maintenance cost of that bridge?What is the equivalent uniform annual cost over the entire-50 year period?
Given the cash flows in table below. Determine the value of P. i= 6% per year Year 0 1 2 3 4 5 Cash Flow -P 400 800 1200 1600 1800 Group of answer choices $4709.14 $6125.15 $5125.63 $4978.23
Littrell's Nursery needs a new irrigation system. System one will cost $145,000, have annual maintenance costs of $10,000, and need an overhaul at the end of year six costing $30,000. System two will have first year maintenance costs of $5,000 with increases of $500 each year thereafter. System two would not require an overhaul. Both systems will have no salvage value after 12 years. If Littrell's cost of capital is 4%, using annual worth analysis determine the maximum Littrell's should be willing to pay for system two.
Build modelA new engineer is evaluating whether to usea higher-voltage transmission line. It will cost $245,000 more initially, but it will reduce transmission losses. The optimistic, most likely, and pessimistic projections for annual savings are $21,000, $14,000, and $9,000 respectively. The interest rate is 7%, and the transmission line has a life of 30 years. (a) What is the present worth for estimated value of each scenario? (b ) What is the expected (mean) Present Worth?
Economics
QZY, Inc. is evaluating new widget machines offered by three companies. The chosen machine will be used for 3 years. a) Construct a choice table for interest rates from 0% to 100%. B) MARR = 15%. From which company if any should you buy the widget machine? Use rate of return analysis. A B C First cost $15,000 $25,000 $20,000 Maintenance and operating 1,600 400 900 Annual benefits 8,000 13,000 9,000 Salvage value 3,000 6,000 4,500 a) Construct a choice table for interest rates from 0% to 100% b) MARR = 15%. From which company if any should you buy the widget machine? Use rate of return analysis
PLEASE TAKE INTO ACCOUNT THAT "g" EQUALS 7 IN THIS PROBLEM AND PLEASE DRAW THE CASH FLOW DIAGRAM

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