2) A logistics firm is deciding between two models of semi-trailer trucks to add to its fleet. The manager ofthe company has prepared the following information for the economic evaluation of this decision. The newtrucks are to be used for seven years and then sold for the estimated salvage value. The before-tax minimumattractive rate of return of the company is 16.39% per year and the effective tax rate is 39%. Select a machineon the basis of after-tax annual worth analysis using the MACRS general depreciation system.AlternativeInitial InvestmentNet Annual BenefitSalvage valueUseful Life (years)P1$245,000$155,000$44,50010P2$230,000$140,000$37,50010

Alternative 1 Year cash flows Depreciation Profit after tax Profit after tax +…

even years and then sold for the estimated salvage value. the company is 16.39% per year and the effective tax rate nual worth analysis using the MACRS general deprecial Alternative Initial Investment Net Annual Benefit Salvage value Useful Life (years) P1 $245,000 $155,000 $44,500 10 P2 $230,000 $140,000 $37,500 10

even years and then sold for the estimated salvage value. the company is 16.39% per year and the effective tax rate nual worth analysis using the MACRS general deprecial Alternative Initial Investment Net Annual Benefit Salvage value Useful Life (years) P1 $245,000 $155,000 $44,500 10 P2 $230,000 $140,000 $37,500 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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I need the answer in 10 minutes please
please answer both question i will appreciate your work.
a. Calculate using the PW method if the useful life is 50 years and the MARR is 10% per year and determine which is the best alternative.b. If the useful life of project A is 25 years, project B and project C are 50 years each, using the AW method, which project will be selected.attached:Investment: A = $8.500.000B $10.000.000C= $12.000.000O & M annual: A $750.000B = $725.000C = $700.000Salvage value: A = $1.250.000B = $1.750.000CS2.000.000annual benefits: A = $2.150.000B = $2.265.000C = $2.500.000
A manufacturing company is evaluating an investment plan to produce a new product based on the following estimated data: • Equipment Cost: $150,000 • Overhead Cost: $30,000/year • Sales price: $12/unit Operation cost: $20/operating hour • Production time: O.1 hour/unit • Planning horizon: 4 years • MARR: 15% Salvage value after 4 years: 0 By using break-even analysis, the break-even sales value for the product should be: Select one: a. 6755 units X b. 8255 units C. 9755 units d. 11,255 units The correct answer is: 8255 units
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
1. The first cost of a component is $ 50,000. It will have an annual operating cost of $20,000 and $5,000 salvage value after its 5-year life. At an interest rate of 10% per year, what is the capitalized cost?