Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Please Answer My Questions Economics no 3 In 30-35 Minutes as u know from the sub parts A,B,C..... And send u get Answer please thank u

Transcribed Image Text:3. A company plans to provide a special parking space for its
employees. There are 2 alternatives being considered to build the
parking lot.
The first alternative is relatively simple and only requires an initial cost
of IDR. 10,000,000, and is estimated to be only 3 years old.
Expenditure for maintenance is estimated at IDR 2,000,000 per year.
The second alternative is relatively more sophisticated and can make
the parking lot 12 years old and the maintenance costs can be ignored,
the initial cost is IDR 30,000,000, it just needs to repaint the parking
signs every 2 years at a fee of IDR 1,000,000 each time ,-.
If the company's MARR is 15%, determine:
A. Alternative parking lot development that should be chosen by
the company
B. Perform a sensitivity analysis on the above cost parameters and
determine the breakeven condition. Explain your answer
C. Explain the importance/purpose of a sensitivity analysis and
break-even point
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