Given the financial data for four mutually exclusive alternatives in the table below,AC$15,000 $36,000$21,200 45,000First costO &M Cost/ year 1,6004009001,000Benefit/yearSalvage valueLife in years8,00013,0009,00015,0003,0006,0004,60010,0004a) determine the best alternative using theincremental rate of return (AROR) analysis. MARR=10%.b) The most attractive alternative for a MARR of8% isc) The most attractive alternative for a MARR of11 % isd) The most attractive alternative for a MARRover 11.7% is

Internal rate of return is the return in percentage terms which an investment is going to make over…

Answered: Given the financial data for four…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Solve the Engineering Economics Problem: Project Feasibility Indicator Using Annual Worth Analysis, which alternative is more economical? i=10% Method A First Cost: -Php250,000 Annual Cost: -Php 90,000 Salvage Value: Php 30,000 Life: 3years Method B First Cost: -Php130,000 Annual Cost: -Php 25,000 Salvage Value: Php150,000 Life: infinity
A deposit of $20,000 now at an interest rate of 10% per year will accumulate in 10 years to an amount closest to, A 51,900 B $61,500 (c) s54,600 D $67,300
Equipment needed at Valero Corporation refinery for the conversion of corn stock toethanol, a cleaner burning gasoline additive, will cost $175,000 and have net cashflows of $35,000 the first year, increasing by $10,000 per year over the life of 5 years.Develop a spreadsheet chart that plots AW vs interest rate to show where (what interestrate) the project switches from financially justified to unjustified. Use AW as the verticalaxis of the chart, and interest (i) as the horizontal axis of the chart. Use a range ofinterest rates spanning from 10% to 20%, and use increments of 1%. Label both axesand use a title for the chart.
Give typing answer with explanation and conclusion
Consider the comparison between alternatives A and B. Using present worth method of analysis, and at an interest rate of 10% per year, the values of n that you should use in the uniform series factors to make a correct comparison are: A B First Cost ₱500,000 ₱900,000 Annual Operating Cost ₱100,000 ₱40,000 Salvage Value ₱130,000 ₱150,000 Life 3 years 6 years a. n=3 years for A and n=3 years for B b. n=3 years for A and n=6 years for B c. n=6 years for A and n=6 years for B d. n=6 years for A and n=3 years for B
The future worth of a project with initial cost P, positive annual cash flows of A, salvage value S, and interest rate of i over a life of n years can be calculated using which statement? (a) FW = −P(F/P, i%, n) + A(F/A, i%, n) + S(F/P, i%, n) (b) FW = P(F/P, i%, n) + A(F/A, i%, n) + S (c) FW = −P(P/F, i%, n) + A(F/A, i%, n) − A[(P/A, i%, n) + S (d) FW = −P(F/P, i%, n) + A(F/A, i%, n) + S?
Answer the given question with a proper explanation and step-by-step solution.
When faced with different alternatives, there are many criteria that can be used to identify the best one. What is the tangible criterion that is usually used in an engineering economic analysis?
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
Given the data for three different alternatives in the table below, determine the best alternative using the incremental rate of return (∆RoR) analysis. MARR =9%. A B C First cost $15,000 $25,000 $20,000 O &M Cost/ year 1,600 400 900 Benefit/year 8,000 13,000 9,000 Salvage value 3,000 6,000 4,600 Life in years 4 4 4 The better alternative between the second increment (B – C) is:. Group of answer choices Alt. B Alt. C Alt. B or Alt. C Alt. A
Most likely estimates for a project are as follows. MARR Useful life Initial investment Receipts - Expenses (R-E) 10% per year 9 years $5,000 $1,200/year Click the icon to view the relationship between the PW and the percent change in parameter. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. (b) To which variable is the PW most sensitive to? OA. Receipts - Expenses OB. Usefule life OC. Initial Investment (a) Determine whether the statement "An initial investment of $6,000 keeps the investment economical." is true or false. O False O True
The sign of various amounts at different points in time in a cash flow diagram is to be decided based on the type of the decision problem Select one O True O False

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