Ginger has agreed to a lawsuit settlement of $700,000 with a certain pharmaceutical company.The company has offered options to pay her the awarded money.After discussing the terms with the company, she expects that the company should be able to pay her back within 3-5 years Ginger has developed the following estimatesOptionAB-PessimisticCMost likelyD.OptimisticDelay period5 years4 years3yearsCash Flow Estimates, S$700.000 now$151.000 per year for every year the payment is delayed$173.200 per year for every year the payment is delayed$234.500 per year for every year the payment is delayedIf her personal MARR is 15% per year, what is the present worth of each of her options?Option A-PW:Option B- PW:Option C- PW:Option D PW:2.With respect to her personal MARR, which option should she select?

Ginger has agreed to a lawsuit settlement of S700,000 with a certain pharmaceutical company. The company has offered options to pay her the awarded money. Ater discussing the terms with the company she expects that the company should be able to pay her beck within 35 years Ginger has developed the following estimate Option A B-Pessimistic CMost kely D.Opmiste Delay period Syears 4 years 3years Cash Flow Estimates, S $700.000 now $151 000 per year for every year the payment is delayed $173 200 per year for every year the payment is delayed $234 500 per year for every year the payment is delayed If her personal MARR is 15% per year, what is the present worth of each of her options? Option A- PW Option B-PW: Option C-PW: Option D PW: With respect to her personal MARR, which option should she select?

Ginger has agreed to a lawsuit settlement of S700,000 with a certain pharmaceutical company. The company has offered options to pay her the awarded money. Ater discussing the terms with the company she expects that the company should be able to pay her beck within 35 years Ginger has developed the following estimate Option A B-Pessimistic CMost kely D.Opmiste Delay period Syears 4 years 3years Cash Flow Estimates, S $700.000 now $151 000 per year for every year the payment is delayed $173 200 per year for every year the payment is delayed $234 500 per year for every year the payment is delayed If her personal MARR is 15% per year, what is the present worth of each of her options? Option A- PW Option B-PW: Option C-PW: Option D PW: With respect to her personal MARR, which option should she select?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Year иршNHO 1 2 3 4 5 6.O E - $90 20 20 20 20 20 20 F - $110 35 35 35 35 0 0 G - $100 0 10 20 30 40 50 H - $120 0 0 0 0 0 180 (a) Based on the payback period, which alternative is preferred? (b) Based on future worth analysis, which of the four alternatives is preferred at 5% interest? (c) Based on future worth analysis, which alternative is preferred at 20% interest? (d) At 10% interest, what is the benefit-cost ratio for Alt. G?
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Req#2: Use Aw analysis to find the best alternative for your company starting one of the following projects. Your company MARR is 9.1 %. Draw the cashflow diagram. Projects data First cost, $ Annual cost, $/year Annual revenue, $/year Life, years Project-1 -85,000 -23, 100 54,000 5 I Project-2 -135,000 -11,000 55, 100 10 Project-3 -77,000 -21, 100 37, 100 5 Project-4 -90,000 -26, 100 47, 100 5
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Given the following: Alt. A Alt. B Alt. C Initial Cost $25,000 $40,000 $32,000 Benefits Year 1 5000 2000 6000 Year 2 5500 9000 6000 Year 3 6000 8000 6000 Year 4 6500 7000 6000 Year 5 7200 6000 7000 Salvage Value 4000 8000 6500 MARR 8% Find the best alternative using uniform annual cash flow analysis.
The cash flows for the following four alternatives are given below. You may assume the benefits occur throughout the year rather than just at the end of the year. Based upon payback period, the alternative that should be selected is given by the following option: Year A B C D 0 -$1000 -$900 -$950 -$2783 1 200 100 350 1200 2 200 200 350 1200 3 1200 300 350 1200 4 1200 300 350 1200 5 1200 700 350 1200 Group of answer choices B C A Select none D
Show cashflow diagram and full solution.
27) For the following alternatives, (a) find the maximum cost you can spend on alternative A to break even with alternative B if the interest rate is 10% per year. (b) repeat A following expected lives, 5, 8, 10, 12, 15 years using Spreadsheet and Goal seek tool.
Littrell's Nursery needs a new irrigation system. System one will cost $145,000, have annual maintenance costs of $10,000, and need an overhaul at the end of year six costing $30,000. System two will have first year maintenance costs of $5,000 with increases of $500 each year thereafter. System two would not require an overhaul. Both systems will have no salvage value after 12 years. If Littrell's cost of capital is 4%, using annual worth analysis determine the maximum Littrell's should be willing to pay for system two.