Q1: Three mutually exclusive alternatives X, Y, and Z are being considered as a permanent solution to an assembly line bottleneck. The data are: [6 marks] Initial Costa Annual Benefit Useful Life (years) Y Z $10k $15k $20k 1.6k 5 1.5k 1.9k 10 15 ⚫ As a prefix in SI units, k is an acronym for kilo, meaning 1,000. Assuming zero salvage value and an annually compounded interest rate of 8% per year, which alternative should be selected based on the AW-criterion. ( Show detailed calculations). Q2: Find out the capitalized cost of a certain investment based on the following: [4 marks] 1. An initial deposit of $100,000 2. Recurring payments of $10,000 each 6 years starting by the end of the first year for infinity. 3. Annual uniform payments of $2,000 starting by the end of year 10 for infinity. Use Interest rate = 6%
Q1: Three mutually exclusive alternatives X, Y, and Z are being considered as a permanent solution to an assembly line bottleneck. The data are: [6 marks] Initial Costa Annual Benefit Useful Life (years) Y Z $10k $15k $20k 1.6k 5 1.5k 1.9k 10 15 ⚫ As a prefix in SI units, k is an acronym for kilo, meaning 1,000. Assuming zero salvage value and an annually compounded interest rate of 8% per year, which alternative should be selected based on the AW-criterion. ( Show detailed calculations). Q2: Find out the capitalized cost of a certain investment based on the following: [4 marks] 1. An initial deposit of $100,000 2. Recurring payments of $10,000 each 6 years starting by the end of the first year for infinity. 3. Annual uniform payments of $2,000 starting by the end of year 10 for infinity. Use Interest rate = 6%
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Q1: Three mutually exclusive alternatives X, Y, and Z are being considered as a permanent
solution to an assembly line bottleneck. The data are: [6 marks]
Initial Costa
Annual Benefit
Useful Life (years)
Y
Z
$10k
$15k
$20k
1.6k
5
1.5k
1.9k
10
15
⚫ As a prefix in SI units, k is an acronym for kilo, meaning 1,000.
Assuming zero salvage value and an annually compounded interest rate of 8% per year,
which alternative should be selected based on the AW-criterion. ( Show detailed
calculations).
Q2: Find out the capitalized cost of a certain investment based on the following:
[4 marks]
1. An initial deposit of $100,000
2. Recurring payments of $10,000 each 6 years starting by the end of the first year for
infinity.
3. Annual uniform payments of $2,000 starting by the end of year 10 for infinity.
Use Interest rate = 6%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fff1880fc-8a60-4c65-ade5-73de44dc0bcb%2Fae298856-aabb-4999-b3de-aad76e9ec030%2F227ml0z_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Q1: Three mutually exclusive alternatives X, Y, and Z are being considered as a permanent
solution to an assembly line bottleneck. The data are: [6 marks]
Initial Costa
Annual Benefit
Useful Life (years)
Y
Z
$10k
$15k
$20k
1.6k
5
1.5k
1.9k
10
15
⚫ As a prefix in SI units, k is an acronym for kilo, meaning 1,000.
Assuming zero salvage value and an annually compounded interest rate of 8% per year,
which alternative should be selected based on the AW-criterion. ( Show detailed
calculations).
Q2: Find out the capitalized cost of a certain investment based on the following:
[4 marks]
1. An initial deposit of $100,000
2. Recurring payments of $10,000 each 6 years starting by the end of the first year for
infinity.
3. Annual uniform payments of $2,000 starting by the end of year 10 for infinity.
Use Interest rate = 6%
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