The alternatives for an engineering project to recover most of the energy presently being lost in the primary cooling stage of a chemical processing system have been reduced to two designs. Theestimated capital investment amounts and annual expenses are as follows:DesignEnd-of-YearER1ER2$115,000$81,2001$ 29,000$19,7502$ 29,150$19,7503$ 29,300$19,750$ 29,450$19,750$ 29,600$19,7505$ 29,750$19,750Assume that the MARR is 12% per year, the study period is six years, and the salvage value is zero for all designs. Using incremental analysis procedure,a. At 10%, What is the NPV of the project? Round off your answer to whole number.b. Using 25%, indicate the NPV of the project. Round off your answer to whole number.c. What is the IRR of this project? Enter rate with two decimal values.d. Which alternative should be undertaken?

the minimum acceptable rate of return, often abbreviated MARR, or hurdle rate is the minimum rate…

hated capital investment amounts and annual expenses are as follows: Design End-of-Year ER1 ER2 $115,000 $81,200 1 $ 29,000 $19,750 2 $ 29,150 $19,750 $ 29,300 $19,750 4 $ 29,450 $19,750 $ 29,600 $19,750 5 $ 29,750 $19,750 6 me that the MARR is 12% per year, the study period is six years, and the salvage value is zero for all designs. Using incremental analysis procedure, 10%, What is the NPV of the project? Round off your answer to whole number.

hated capital investment amounts and annual expenses are as follows: Design End-of-Year ER1 ER2 $115,000 $81,200 1 $ 29,000 $19,750 2 $ 29,150 $19,750 $ 29,300 $19,750 4 $ 29,450 $19,750 $ 29,600 $19,750 5 $ 29,750 $19,750 6 me that the MARR is 12% per year, the study period is six years, and the salvage value is zero for all designs. Using incremental analysis procedure, 10%, What is the NPV of the project? Round off your answer to whole number.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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