Determine the capitalized cost for an asphalt road that will require a construction cost of P10M, P50 000.00 each year end for maintenance, plus an expenditure of P1M every four years for re pavement. Money is worth 15% effective. a. P15 640 236.65

Determine the capitalized cost for an asphalt road that will require a construction cost of P10M, P50 000.00 each year end for maintenance, plus an expenditure of P1M every four years for re pavement. Money is worth 15% effective. a. P15 640 236.65

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Q8. Required information A new advertising campaign by a company that manufactures products that apply biometric, surveillance, and satellite technologies resulted in the cash flows shown. Year Cash Flow, $1000 0 2000 1 1200 2 –4000 3 –3000 4 2000 Calculate the unique external rate of return values using the ROIC method with an investment rate of 30% per year. The external rate of return using the ROIC method is %.
Retainer 0 1 Expenses 2 Revenue N Years How much can you afford to spend on the first year expenses on a project with the above cash flow?, given; Your MARR is 10.00%, the client has given you a retainer of $5,700, annual revenues are expected to be $2,750, the external rate of return required for this project is 19.5% and the entire project will last 8 years. (Round your answer to the nearest penny)
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D Question 1 Consider a project that has an initial investment of $100,000 and that returns $36,000 per year for the next 5 years. If the MARR is 12%, is this a good investment? Use interest factor to evaluate the project based on PW. Since PW - $4,671.40 is positive, this is a good investment. Since PW-$29,744.80 is positive, this is a good investment. A revenue of $36,000 per year for five years is not acceptable. This is not a good investment. O Since PW-$56,889 indicates a loss, this investment is not good.
Solve by incremental cashflow then PW = 0. To get the value of i by interpolation. Problem 3: Two plans for a hydroelectric project in Peru have been proposed. The opportunity cost, in soles, of resources is 10 percent. Data on the two alternatives are: System First cost ($/,000,000,000) 300 160 Economic life (years) 40 20 Salvage value ($/,000,000,000) 15 12 Annual benefits (S/.000,000,000) 25 22 Annual costs ($/,000,000,000) 3 1 Using the internal rate of return method, which of the two systems should be chosen or should either be selected?
Question 4 A local company is considering in investing in new, more productive equipment Data concerning the three best aternatives are show below. The useful life of the equipment is 20 years and MARR =9K What is the incremental return on the first incremental pair (ahen andered by increasing investment) RRI Ars What is the incremental IRR on the second pair? Ars Which alternative would you select? Ans. X B C Initial S66.000.00 $55,000.00 $23.500.00 $17,32000 investment $7.830.00 Annual net $6.093.00 $3.177.00 $165300 income Salvage value $4.500.00 $3.23200 $1.73a0 1237% S8.230.00 10.40% 7.465 9.35% IRR
MARR 20% EOY Cash Flow 0 $(70,000.00) 1 $ 20,000.00 2 $ 19,000.00 3 $ 18,000.00 4 $ 17,000.00 5 $ 16,000.00 6 $ 15,000.00 7 $ 14,000.00 8 $ 13,000.00 9 $ 12,000.00 10 $ 11,000.00 11 $ 10,000.00 12 $ 9,000.00 13 $ 8,000.00 14 $ 7,000.00 15 $ 6,000.00 16 $ 5,000.00 17 $ 4,000.00 18 $ 3,000.00 19 $ 2,000.00 20 $ 1,000.00 Plot a graph of FW versus MARR, where MARR varies from 0 percent to 50 percent by 1 percent increments.FW should be on the y-axis and MARR on the x-axis. How do you find FW? Please show all steps and formulas used in excel format. Thank you!
MARR 20% EOY Cash Flow 0 $(70,000.00) 1 $ 20,000.00 2 $ 19,000.00 3 $ 18,000.00 4 $ 17,000.00 5 $ 16,000.00 6 $ 15,000.00 7 $ 14,000.00 8 $ 13,000.00 9 $ 12,000.00 10 $ 11,000.00 11 $ 10,000.00 12 $ 9,000.00 13 $ 8,000.00 14 $ 7,000.00 15 $ 6,000.00 16 $ 5,000.00 17 $ 4,000.00 18 $ 3,000.00 19 $ 2,000.00 20 $ 1,000.00 Plot a graph of FW versus MARR, where MARR varies from 0 percent to 50 percent by 1 percent increments.FW should be on the y-axis and MARR on the x-axis.
Would love some help on how to approach this - thanks! The cash flows for three different alternatives are given in table below. MARR = 10%. Initial cost Annual benefits ROR Life in years Alt. A Alt. B Alt. C $5,000 9,000 7,500 $1,457 2,518 2,133 14% 13% 12.4% 1. AROR for the first increment (Alt. C-Alt. A) is A.10.12% B. 9.38% A. Alt. C 5 2. AROR for the second increment is A. 10.12% B. 9.38% B. Alt. A C. 11.85% D. 11.00% C. 8.94% 3. The best alternative for a MARR of 10% using the incremental rate of return analysis is D. Do nothing D. 9.87% C. Alt. B
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