Samsung Electronics is considering a product expansion of their Galaxy S Series. Two alternativesfor the cell phone expansion are summarized below. The company uses a MARR of 8% per yearfor decisions of this type, Future Worth and Co-terminated assumption is used with study periodof 8 years. Which alternative should be recommended and why?Expansion AExpansion BCapital investmentAnnual revenue$1,250,000$1,000,000$760,000$580,000Annual expensesSalvage valueUseful life$500,000$100,000$360,000$150,0006 years8 years

or decisions of this type, Future Worth and Co-terminated assumption is used with of 8 years. Which alternative should be recommended and why? Expansion A Expansion B Capital investment Annual revenue $1,000,000 $1,250,000 $760,000 $580,000 Annual expenses Salvage value Useful life $500,000 $360,000 $100,000 $150,000 6. 6 уеars 8 years

or decisions of this type, Future Worth and Co-terminated assumption is used with of 8 years. Which alternative should be recommended and why? Expansion A Expansion B Capital investment Annual revenue $1,000,000 $1,250,000 $760,000 $580,000 Annual expenses Salvage value Useful life $500,000 $360,000 $100,000 $150,000 6. 6 уеars 8 years

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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With the given information please calculate NPV, NPW, EUAW, and IRR for each alternative. The interest rate is 15%
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2
A Cost $4000 $2000 $6000 $1000 $9000 Annual benefit 639 410 761 117 750 Useful life, in years 20 20 20 20 20 i* 15% 20% 11.1% 9.9% 5.45% Perform incremental ROR analysis to select best one. MARR=6%; (P/A, 6%, 20) = 11.47 %3D
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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
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Subject:eco
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