12234567899101112131415ANet Present Value-Unequal LivesDakota Mining Company has two competing proposals: a diamond core drill or a hydraulic excavator. The following data is provided:DATA2324Year1B234456784 (residual value)161718 Initial investment19 Minimum rate of returnNet Cash FlowDiamond Core Drill Hydraulic Excavator$308,000240,000240,000253,000270,000178,0002526 Net present value27139,000125,000125,000$335,000323,000313,000312,000$790,00010%2021 REQUIRED:22 Determine which equipment should be favored, comparing the net present values of the two proposals.EUsing formulas and cell references from the problem data, perform the required analysis.Formulas entered in the green cells show in the orange cells. Transfer amounts to CNOWv2for grading.Diamond Core Drill Hydraulic ExcavatorFFormulas

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Dakota Mining Company has two competing proposals: a diamond core drill or a hydraulic excavator. The following data is provid DATA Year 1 2 3 445678 4 (residual value) Initial investment Minimum rate of return Net Cash Flow Diamond Core Drill Hydraulic Excavator $308,000 240,000 240,000 253,000 270,000 178,000 139,000 125,000 125,000 $335,000 323,000 313,000 312,000 $790,000 10%

Dakota Mining Company has two competing proposals: a diamond core drill or a hydraulic excavator. The following data is provid DATA Year 1 2 3 445678 4 (residual value) Initial investment Minimum rate of return Net Cash Flow Diamond Core Drill Hydraulic Excavator $308,000 240,000 240,000 253,000 270,000 178,000 139,000 125,000 125,000 $335,000 323,000 313,000 312,000 $790,000 10%

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

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34567899
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15
A
Net Present Value-Unequal Lives
Dakota Mining Company has two competing proposals: a diamond core drill or a hydraulic excavator. The following data is provided:
DATA
23
24
Year
1
B
23445678
4 (residual value)
16
17
18 Initial investment
19 Minimum rate of return
Net Cash Flow
Diamond Core Drill Hydraulic Excavator
$308,000
240,000
240,000
253,000
270,000
178,000
25
26 Net present value
27
139,000
125,000
125,000
$335,000
323,000
313,000
312,000
$790,000
10%
20
21 REQUIRED:
22 Determine which equipment should be favored, comparing the net present values of the two proposals.
E
Using formulas and cell references from the problem data, perform the required analysis.
Formulas entered in the green cells show in the orange cells. Transfer amounts to CNOWv2
for grading.
Diamond Core Drill Hydraulic Excavator
F
Formulas

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