Six sites have been identified for a parking lot in downtown Beirut. Because the sitesare plots of land, their salvage value and investment cost are identical. A 10-yearstudy period has been specified, and the MARR is 18% per year. (Figures below arein thousands of dollars).PressABCDEFCapital Investment$100$150$250$400$500$700Annual Revenues minus Expenses$15$37.5$50$92.5$112.5$142.5If the MARR=18%, Which site should be chosen ?On the same excel spreadsheet use the following methods:a- Present Worthb- Annual WorthC- IRR

To determine the optimal parking lot site, we evaluated six options using Present Worth (PW), Annual…

Answered: Six sites have been identified for a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Equipment needed at Valero Corporation refinery for the conversion of corn stock toethanol, a cleaner burning gasoline additive, will cost $175,000 and have net cashflows of $35,000 the first year, increasing by $10,000 per year over the life of 5 years.Develop a spreadsheet chart that plots AW vs interest rate to show where (what interestrate) the project switches from financially justified to unjustified. Use AW as the verticalaxis of the chart, and interest (i) as the horizontal axis of the chart. Use a range ofinterest rates spanning from 10% to 20%, and use increments of 1%. Label both axesand use a title for the chart.
The capitalized cost (CC) of the given project whose Cash Flow diagram is given below is closest to: = 10% per year 5 6 7 8 9 10 11 2 3 A= $2,000 PO=S30,000 C-55000 (Recurring every 5 y ears) C=55000 (Recurring every 5 years) Captalized Cost= ?
Dexcon Technologies, Inc., is evaluating two alternatives to produce its new plastic filament with low friction properties for creating custom bearings for 3-D printers. The estimates associated with each alternative are shown below. Using a MARR of 16% per year, which alternative has the better present worth and what is that value (select the closest value)? Method First Cost AOC, per Year Salvage Value Life DDM $170,000 $65,000 $4,000 2 years LS $350,000 $40,000 $29,000 4 years DDM with a PW--$473,000 LS with a PW --$445,900 LS with a PW --$222,055 DDM with a PW--$109,300
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1. The annual worth for years 1 through infinity of $75,000 now, $25,000 per year in years 1 through 15 and S40,000 per year in years 16 through infinity at a 10% interest per year is closest to: (a) $27,500 (b) $36,000 (c) $44,000 (d) $ 19,500 1. For the estimates in table below, calculate the equivalent annual cost of the project: First Cost, $ -950,000 Replacement Cost, year 2 AOC, $/ year Salvage value, $ -450,000 -600,000 175,000 Life, years 4 Interst Rate % 10
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Virgin Galactic is considering two materials for certain parts in a re-useable space vehicle: carbon fiber reinforced plastic (CFRP) and fiber reinforced ceramic (FRC). The costs are shown below. Which should be selected on the basis of a present worth comparison at an interest rate of 10% per year? Solve using (a) tabulated factors, and (b) single-cell spreadsheet functions.
Most likely estimates for a project are as follows. MARR Useful life Initial investment Receipts - Expenses (R-E) 10% per year 9 years $5,000 $1,200/year Click the icon to view the relationship between the PW and the percent change in parameter. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. (b) To which variable is the PW most sensitive to? OA. Receipts - Expenses OB. Usefule life OC. Initial Investment (a) Determine whether the statement "An initial investment of $6,000 keeps the investment economical." is true or false. O False O True
E4 An engineer at Delphi Systems is considering the projects below, all of which can be considered to last indefi nitely. The company’s MARR is 13% per year. (a) Determine which projects should be selected on the basis of IROR if the budget limitation is $39,000. (b) What is the overall rate of return if the money not invested in projects is assumed to earn a rate of return equal to the MARR?
Three mutually exclusive electric-vehicle battery systems are being investigated by a large automobile manufacturer. Pertinent data are given below: Solve, a. Use the PW method to select the best battery system. The MARR is 15% per year, and the system chosen must provide service for 10 years. Assume repeatability. b. Confirm your recommendation in Part (a) using the IRR method.

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