Two investment projects are being evaluated based on their payback periods. The first alternative requires an initial investment of $340,000, has gross revenues of$61,000, annual O &M costs of $13,000 and a service life of 16 years. What is the project's discounted payback period if the MARR is 8% per year?A. 13.5 yearsB. 10.9 yearsC. 7.7 yearsO D. 6.6 yearsIf the second alternative has a payback period of 6 years, which alternative should be preferred based on the payback period?O A. The second alternativeB. The first alternative

The payback period is described as the number of years needed to recover the original cash…

Answered: $61,000, annual O &M costs of $13,000…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

Time left 1:14:17 What is the Future worth of the following cashflows: First Cost = 52,000$, AOC = 4,000$, Salvage value = 12,000$, n = 13 and i= 14%. O a. -73,185$ O b. -12,527$ O c. 49,606$ O d. -401,960$ Recovery period is the remaining interval of time in the life of the asset in years. Select one: a. True O b. False
please answer both question i will appreciate your work.
Answer part A Answer part B
A $45,000 investment in a new conveyor system is projected to improve throughput and increasing revenue by $14,000 per year for five years The conveyor will have an estimated market value of $4,000 at the end of five years. Using an MARR = 12% per year, what is the FW? $-19,329.40 $13,635.70 $16,998.90 none of the above W ?
Swiss franc 1-year forward rate $1.17 !! Swiss franc spot rate now $1.09 %3D Also assume that a U.S. exporter denominates its Swiss exports in Swiss francs and expects to receive SF500,000 in 1 year. Using the information above, what will be the approximate value of these exports in 1 year in U.S. dollars given that the firm executes a forward hedge? O$545,000 O$438,596 $585,000 O $570,000
A $45,000 investment in a new conveyor system is projected to improve throughput and increasing revenue by $14,000 per year for five years The conveyor will have an estimated market value of $4,000 at the end of five years. Using an MARR = 12% per year, what is the FW? $-19,329.40 $13,635.70 $16,998.90 none of the above K ?
Which of the following interpretations would be best for the scenario analysis results shown below? Worst- case PW (18%) -$650,000 IRR 2.10% Most- likely case Best-case $58,000 $2,660,000 33% 14.60% a. Since the most-likely case has a PW <0, the project should be abandoned immediately b. Since the worst-case has a negative present worth, this project must be rejected. c. Since the average of the three cases is a positive present worth, the project is acceptable. d. Because only one of the scenarios shows the project as profitable, the project should be considered very risky, and, if accepted, should be subject to greater scrutiny in its planning and forecasting.
Two investment projects are being evaluated based on their payback periods. The first alternative requires an initial investment of $760,000, has gross revenues of $118,000, annual O &M costs of $23,000 and a service life of 20 years. What is the project's discounted payback period if the MARR is 8% per year? OA. 8.3 years OB. 13.3 years O C. 16.7 years OD. 9.4 years If the second alternative has a payback period of 8 years, which alternative should be preferred based on the payback period? OA. The first alternative OB. The second alternative

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS