Dark Skies Observatory is considering several options to purchase a new deep-space telescope. Revenue would begenerated from the telescope by selling "time and use" slots to various researchers around the world. Four possibletelescopes have been identified in addition to the possibility of not buying a telescope if none are financially attractive.The table below details the characteristics of each telescope. An external rate of return analysis is to be performed usinga MARR of 25%.Useful LifeComparison 1:Comparison 2:Comparison 3:Comparison 4:First Cost10 years10 years 10 years$600,000 $800,000 $470,000Salvage Value$70,000 $130,000 $65,000 $200,000Annual Revenue $400,000 $600,000 $260,000 $320,000Annual Expenses $130,000 $270,000 $70,000 $120,000Which telescope (if any) is most financially attractive?T1ERR 1:Show the comparisons and external rates of return used to reach this decision:ERR 2:ERR 3:T2ERR 4:T3%%%T4%10 years$540,000Carry all interim calculations to 5 decimal places and then round your final answer to 1 decimal place. The tolerance is ±0.2.

The External Rate of Return (ERR) is a concept used in project evaluation and investment analysis,…

Answered: Dark Skies Observatory is considering…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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An economic evaluation of the following mutually exclusive alternatives is being conducted. Since they have different service lives, repeatability is assumed and an analysis period of 18 years is used. The MARR is 10%. Initial cost Annual revenues Service life (years) Alternative A $30,000 $15,000 6 Alternative B $120,000 $40,000 Answer the following two questions: (1) The net AW of Alternative B over the analysis period is (select the closest value) A. $60,837 B. $25,368 C. $10,737 D. $19,163 (2) The net PW of Alternative B over the analysis period is (select the closest value) A. $88,056 B. $208,056 C. $110,360 D. $157,164
Determine the capitalized cost of a project that cost P324,000 with an anticipated salvage value of P50,000 at the end of four years, if money is worth 8%, Annual maintenance cost is P20,000.
A bridge design firm is performing an economic analysis of two mutually exclusive designs for a highway overpass. The steel girder option has an initial cost of $2.26 million, and the concrete option has an initial cost of $2.33 million. Every 25 years, the steel bridge must be painted at a cost of $560,000, and all other maintenance costs are the same for both options. The steel bridge is expected to last 50 years, and concrete bridge is expected to last 75 years. Based on the shortest acceptable analysis period, determine the present worth of costs for the best option using an interest rate of 7%. Express your answer in $ to the nearest $10,000.
Two investment projects are being evaluated based on their payback periods. The first alternative requires an initial investment of $520,000, has gross revenues of $85,000, annual O&M costs of $17,000 and a service life of 23 years. What is the project's discounted payback period if the MARR is 10% per year? OA. 8.8 years OB. 19.1 years OC. 15.2 years OD. 9.9 years If the second alternative has a payback period of 20 years, which alternative should be preferred based on the payback period? OA. The second alternative OB. The first alternative
A company purchases manufacturing equipment for $ 3,950,000. The company produces 1,800 units of production per year. The revenue associated with each production unit is $ 1,310. The total annual costs per production unit is $ 630. a) What is the non-discounted payback period? b) What is the payback period if MARR = 20.00% Answer to part b) can be within a 1 year range.
I need help with this question. Thank you.
A new baseball stadium is being considered to be built in a metropolitan area by High Tech, Inc., at a cost of $50M. It is estimated that the annual maintenance cost will be $100K. The construction company recommends a major renovation every 50 years at a cost of $10M. If the corporation wants to set up a trust fund to pay for the stadium, its maintenance, and periodic renovations for an undefined number of years to come, what amount should be invested in the trust fund if the fun earns an annual interest rate of 6%? Group of answer choices $52,223,000 $60,566,667 $60,666,667 $73,500,429 $58,600,000
What is the payback period for a project with the following characteristics, given a minimum attractive rate of return (MARR) of 12%? First Cost $20,000 Annual Benefits $8,000 Annual Maintenance $2,000 in year 1, then increases by $500 per year Salvage value $2,000 Useful Life 10 years
4.3. Use ERR analysis to determine which alternative would be the best economical choice. Verify your decision with NPC analysis. Assume the MARR equals 10%. Alternative A: -500 -25 -25 -25 -25 L = 100 Alternative B: 1 3 -300 -50 -50 -50 -50 L= 25 Alternative C: 2 3 -250 -75 -60 -45 -30 L= 10 Alternative D: 2 450 -35 -35 -35 -35 L= 100
A city is spending $19.3 million on a new sewage system. The expected life of the system is 40 years, and will have no market value at the end of its life. Operating and maintenance expenses for the system are projected to average $0.8 million per year. If the city's MARR is 7% per year, what is the capitalized worth of the system? The study period is 100 years.
Determine the capitalized cost of a series of cash flows starting at the end of the first year with $400 and increasing at the rate of $100 for the next 5 years. The series of cash flows from year 1 to 6 repeats forever. MARR= 6%
The Civil Engineering department at RRCP plans to purchase a 3D printer for the CARSI lab. One option is the purchase of a brand new machine (purchase price $1900), and will have a salvage value of $700 after three years. A second option is the purchase of a refurbished machine (purchase price $1200), which will cost $250 per year to maintain, with a salvage value of $250 after three years. What is the interest rate that will make these two options equivalent with respect to Present Worth?

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