Question 2 Part A:A new project is being considered. The initial cost of the project is $100,000. It is expected that revenues will be $23,000 annually. There will be annual operating expenses of $10,000.At the end of the 8-year life of the project, there is a salvage value of $20,000. Use a MARR of 5%. Perform a PW (present worth) analysis.Question 2 Part A: Choose the correct Cash Flow Diagram for this scenario from the following choices.Option A23,000100,000110,000Option B23,000081i=5%20,000Option C23,00001100,00010,000i = 5%100,00020,000Option D810100,00010,0008i=5%20,00023,00010,000i = 5%20,0008

A Cash Flow Diagram (CFD) is a graphical representation of cash inflows and outflows over a certain…

Answered: Question 2 Part A: A new project is…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

am. 175.
None
5. Solve the given question and give the correct answer.
Find the conventional payback period for the following project: First Cost $10,000 $500 in Year 1, increasing by $200/year $3,000/year $4,000 Maintenance Income Salvage Useful Life 10 years MARR 10%
Rubber: Initial investment: $132,000 Annual cost: $43,000 Annual revenue: $100,000 Salvage value: $11,000 Useful life: 10 years Using the cotermination assumptions, a study period of 6 years, and a MARR of 9%, what is the present worth of the rubber alternative? Assume that the rubber alternative's equipment has a market value of $17,000 at the end of Year 6. Typed numeric answer will be automatically saved.
The following data applies for example problems 8.1 through 8.3. A company is considering the purchase of either machine A or machine B. machine A machine B initial cost $80,000 20 years $20,000 $18,000 per year $100,000 25 years $25,000 $15,000 per year for the first 15 years $20,000 per year for the next 10 years estimated life salvage value other costs The interest rate is 10%, and all cash flows may be treated as end-of-year cash flows. Assume that equivalent annual cost is the value of the constant annuity equal to the total cost of a project. The equivalent annual cost of machine B is most nearly (A) $21,000 (B) $21,500 (C) $23,000 (D) $26,500
A factory manager is considering the purchase of one of the following two production equipment. Cash flow estimates for equipment A are in year-zero dollars while those of equipment B are in actual dollars. Equipment A (year-zero $) Initial investment Net annual revenue $9,800 $3,000 Market value at end of useful life Useful life, years $0 12 Equipment B (actual $) $11,200 $4,000 $0 12 The manager uses a market interest rate of 12% per year. If inflation rate is expected to average 7.69% per year over the next several years, determine the PW of each equipment. 1. The PW of Equipment A is A. $18,355 B. $13,176 ○ C. $12,800 ○ D. $8,783 2. The PW of Equipment B is ○ A. $15,200 B. $26,340 ○ C. $13,577 OD. $19,435
An economic evaluation of the following mutually exclusive alternatives is being conducted. Since they have different service lives, repeatability is assumed and an analysis period of 18 years is used. The MARR is 10%. Initial cost Annual revenues Service life (years) Alternative A $30,000 $25,000 6 Alternative B $100,000 $40,000 9 Answer the following two questions: (1) The net AW of Alternative B over the analysis period is (select the closest value) A. $15,614 B. $27,807 C. $22,636 D. $57,364 (2) The net PW of Alternative B over the analysis period is (select the closest value) A. $228,056 B. $185,647 C. $130,361 D. $128,056
The following alternatives are available to accomplish an objective of 12 years duration: Metal $25,000 Metal and Concrete $50,000 30 years $0 $2,800 Life cycle Period before replacement Salvage value Annual maintenance Compare the present worth of the alternatives using an interest rate of 7%. 20 years $5,000 $5,500
Tempura, Inc., is considering two projects Project Arequires an investment of $44,000. Estimated annual receipts for 20 years are $23,000; estimated annual costs are $12,500. An alternative project, B, requires an investment of $77,000, has annual receipts for 20 years of $27,000, and has annual costs of $18,000. Assume both projects have a zero salvage value and that MARR is 15.5 %/year. Click here to access the TVM Factor Table Calculator Part a Your answer is incorrect. What is the present worth of each project? Project A: $ Project B: $ 573083 -26658

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS