1. The annual worth for years 1 through infinity of $75,000 now, $25,000 per year in years 1 through 15 andS40,000 per year in years 16 through infinity at a 10% interest per year is closest to:(a) $27,500(b) $36,000 (c) $44,000 (d) $ 19,5001. For the estimates in table below, calculate the equivalent annual cost of the project:First Cost, $-950,000Replacement Cost, year 2AOC, $/ yearSalvage value, $-450,000-600,000175,000Life, years4Interst Rate %10

1) Present worth of $40,000 till perpetuity is given by $40,000 / Interest rate = $40,000/ 10% =…

Answered: First Cost, $ -950,000 -450,000…

First Cost, $ -950,000 -450,000 -600,000 Replacement Cost, year 2 AOC, $/ year Salvage value, $ Life, years 175,000 Interst Rate % 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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Question

1. The annual worth for years 1 through infinity of $75,000 now, $25,000 per year in years 1 through 15 and
S40,000 per year in years 16 through infinity at a 10% interest per year is closest to:
(a) $27,500
(b) $36,000 (c) $44,000 (d) $ 19,500
1. For the estimates in table below, calculate the equivalent annual cost of the project:
First Cost, $
-950,000
Replacement Cost, year 2
AOC, $/ year
Salvage value, $
-450,000
-600,000
175,000
Life, years
4
Interst Rate %
10

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