EUAW Selection Example • You wish to select from three mutually exclusive alternatives. Which is the best using the EUAW? MARR is 8%. t 0 1-14 15 Alt A2t A3t -75,000 -125,000 -100,000 23,000 28,000 25,500 68,000 53,000 60,500

Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.

The following four alternative investments are being compared at MARR of 12%. Which investment is the most economical over the entire service life? Alt. L Alt. W 10 10 $590,000 $645,000 Alt. D 10 $495,000 14.2% 9 13.4% 15% 6 5 Service life (years) Net PW IRR Disc payback period (yrs) Alt. X 10 $533,000 16.2% 8 OA. Alternative D because it has the longest payback period OB. Alternative W because it has the highest net PW OO C. Alternative L because it has the shortest payback period OD. Alternative X because it has the highest IRR

Alternative 3 is incorrect  EUAC=( Equivalent Annaul COst of Initial Investment)+ (Expected Moderate annaual flood damage cost )+ (expected severe annaual flood cost )

AN INDUSTRIAL PLANT IS CONSIDERING THE PURCHASE OF A CENTRIFUGAL PUMP. THREE OFFERS WERERECEIVED AND BASIS OF SELECTION HAVE BEEN TABULATED AS FOLLOWS: OFFER A OFFER B OFFER CPRICE OF PUMP P 60,000.00 P 96,000.00 P 120,000.00ECONIMIC LIFE (YEARS) 3 5 10SALVAGE VALUE @ END OF ECONOMIC LIFE P 5,000.00 P 10,000.00 P 8,000.00YEARLY MAINTENANCE COST 10,000.00 6,000.00 5,000.00IF COST OF MONEY IS 14%, WHAT OFFER WOULD YOU RECOMMEND TO BE PURCHASED? USE ROR METHOD.

A new manufacturing line is being built and your team has narrowed it down to 2 options. Which one is the best option using a 20% rate to evaluate each option? Answer the question by entering the amount of savings by choosing the best option. Margin of error: +/- 10 Enter your answer as a positive number representing savings from one option to another. Hint: When you use Net present Worth Analysis you must must LCM of the lives to assess each option over the same period. Option A B Operating First and Salvage Cost Maintenance Value Cost/Yr $18M $5M $25M $3M 501,025 $4M $6M Life 10 years 20 years

Problem 1: An investment of P 250,000 can be made in a project that will produce a uniform annual revenue of P 192,800 for 5 years and then have a salvage value of 10% of the first cost. Operation and maintenance will be P 72,000 per year. Taxes and insurance will be 4% of the first cost per year. The company expects capital to earn 20% before income taxes. Show whether or not the investment is justified economically using 1. PW method 2. FW method 3. AW method 4. ROR method

If specific duty is $2 per dozen and ad valorem duty is 20%, find the total duty on 12 dozen padlocks valued at $650.

RESUELVA EL SIGUIENTE PROBLEMA Investment Annual operating Cost. Began first (1)year until the 6th year (A=$1,500) Annual Revenues: Began first (1¹h)year until the 6th year. Additional Revenues: Gradient beginning 2nd year G= $800 until the 6th year. Salvage Value at the end of 6th year or MV8= $2,000 Investment life n=6 years. MARR=6% $10,000 1,500 2,500 G=$800 MV6= $2,000 a. Draw the cash flow diagram b. PW, AW and FW Determine if the investment is viable or not. c. IRR d. ERR

Breakeven Example 8.2 • MARR is 12% per year. Select the more economical vendor bid. -8,000 - 13.000 Initial cost. S -3,500 -1.600 Annual costs, S per year Salvage value. $ Life. vears 2,000 10