For th below two machines and based on AW analysis which machine we should select? MARR=10% Machine A Machine B First cost, $ Annual cost, $/year Salvage value, $ Life, years 3 Answer the below question: B- the AW for machine B= 26,612 12,417 4,135 - 140,454 7,170 infinite

For th below two machines and based on AW analysis which machine we should select? MARR=10% Machine A Machine B First cost, $ Annual cost, $/year Salvage value, $ Life, years 3 Answer the below question: B- the AW for machine B= 26,612 12,417 4,135 - 140,454 7,170 infinite

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Consider two air-conditioning systems with the cash flow estimates as given below. Use AW analysis to determine the sensitivity of the economic decision to MARR values of 4%, 6%, and 8% per year. Air-Conditioning System 1 System First cost, $ AOC. $ per year Salvage valué, $ New compressor and motor cost at midlife, $ Life, years -9,000 -850 -100 Proy -2,200 8 The annual worth of air-conditioning system 1 when the MARR is 4% is $ The annual worth of air-conditioning system 2 when the MARR is 4% is $ The annual worth of air-conditioning system 1 when the MARR is 6% is $ The annual worth of air-conditioning system 2 when the MARR is 6% is $ 10 www Air-Conditioning System 2 -13,000 -105 -300 -3,140 12
5. The physical life is always greater than all the other "life" factors under replacement analysis. 6. If breakeven analysis is conducted with PW analysis for different MEAS, it doesn't guarantee that the fastest alternative to reach its breakeven point has also the highest equivalent worth.
5.24 You and your partner have become very interested in cross-country motorcycle racing and wish to purchase entry-level equipment. You have identified two alternative sets of equipment and gear. Package K has a first cost of $160,000, an operating cost of $7000 per quarter, and a salvage value of $40,000 after its 2-year life. Package L has a first cost of $210,000 with a lower operating cost of $5000 per quarter, and an estimated $26,000 salvage value after its 4-year life. Which package offers the lower present worth analysis at an interest rate of 8% per year, compounded quarterly?
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You have been asked to perform an economic evaluation of two projects and recommend one of them for implementation. The project parameters are as follows: Project A Project B Discount Rate 4.0% 4.0% Your analysis concludes that: Project Cost $1,000,000 $750,000 Project Life (yrs) 10 15 Elec. Savings Elec. Cost (kWh/yr) ($/kWh) 800,000 600,000 O Project A is preferable, but Project B also has attractive performance. O Project B is preferable, but Project A also has attractive performance. O Project B is preferable and Project A results in a net loss. O Project A is preferable and Project B results in a net loss. $0.12 $0.12 Annual Cost Escalation Rate 1.5% 1.5%
If the MARR=10%, compute the value of X that makes the alternatives equally desirable. Do not use spreadsheets. Alternatives Machine A Machine B First cost $12,000 $20,000 Annual Operating cost $1,400/year X Salvage value $2,000 $3,000 Life 4 years 8 years
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QUESTION 7 for th below two machines and based on AW analysis which machine we should select? MARR=10%. Machine A First cost, $ Annual cost, $/year Salvage value, $ Life, years 3 Answer the below question: A- the AW for machine A= 25,433 12,199 7,603 Machine B 100,000 7,000 infinite