The following information is provided for five mutually exclusive alternatives that have 20-year useful lives. If the MARR is 12%, which alternative be selected? Use incremental rate of return Alternatives A B D E Cost $4,000 $2,000 $6,000 $1,000 $9,000 Annual Benefit $639 $410 $761 $117 $785 PW of Benefit $7,330 $4,700 $8,730 $1,340 $9,000 Rate of Return 15% 20% 11% 10% 6%

The following information is provided for five mutually exclusive alternatives that have 20-year useful lives. If the MARR is 12%, which alternative be selected? Use incremental rate of return Alternatives A B D E Cost $4,000 $2,000 $6,000 $1,000 $9,000 Annual Benefit $639 $410 $761 $117 $785 PW of Benefit $7,330 $4,700 $8,730 $1,340 $9,000 Rate of Return 15% 20% 11% 10% 6%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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please answer all with complete solution and draw the cash flow diagram,,, thank you....
Compare three alternatives on the basis of their capitalized costs at /= 11.00% per year and select the best alternative. (Include a minus sign if necessary.) Alternative First Cost AOC, per Year Salvage Value Life, Years E $75000 $-55000 $19000 2 The capitalized cost of alternative E is $ The best alternative is (Click to select) F $-315000 $16000 $69000 4 . alternative F is $ G $ 815000 $-4000 $400000 90 and alternative G is $
Economics A patch of land adjacent to the proposed international airport is likely to increase in value. The cost of land now is INR 8,00,000 and is expected to be worth INR 15,00,000 within 5 years. During this period it can be rented for small scale industry at INR 15000 per year. Annual taxes are presently is INR 8500 and likely to remain constant. What rate of return will be earned on the investment if the estimates are accurate? Draw cash flow diagram.
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YOUR FATHER PLANS TO INVEST P500,000.00 IN AN AUTO WASHING MACHINE WITH THE FF DATA: WASHING CAPACITY- 12 CARS/HR AT 8HRS OPERATION/DAY FOR 6DAYS A WEEK AND 50 WEEKS/YEAR CAR WASH CHARGE-P25/CAR MANUAL LABOR COST (2 WORKERS)-P25/HR PER WORKER PLUS A PAID VACATION BENEFITS OF 2 WEEKS PER YEAR MAINTENANCE COST-P8500.00/MONTH DESIRED RATE OF RETURN ON THE CAPITAL-20% PRESENTLY YOUR FATHER IS EARNING P25,000.00/MONTH AS A REGULAR EMPLOYEE AND WANTS TO CONCENTRATE ON THIS BUSINESS AND WANT TO RECOVER HIS INVESTMENT IN 5 YEARS. USING ROR AND AW METHOD OF ECONOMY STUDIES, SHOULD YOUR FATHER PROCEED WITH THE INVESTMENT?
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A project has an initial cost of $50 000, net annual cash inflows of $20 000, and a $2 000 salvage value after five years. Which of the following gives the project's approximate external rate of return (i*) if MARR = 10%? -50 000(P/F, i*, 5) + 20 000(P/A, i*, 5) + 2 000(F/P, i*, 5) = 0 -50 000(F/P, i*, 5) + 20 000(F/A, i*, 5) + 2 000 = 0 -50 000(F/P, i*, 5) + 20 000(F/A, 10, 5) + 2 000 = 0 -50 000(F/P, i*, 5) + 20 000(P/A, i*, 5) + 2 000 = 0
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