The following pair of assets differ only in the MARR. The problem asks you to determine the effect of this difference on the economic life and to explain the result. All assets dedine in value by 20 percent of current value each year Ins follows. Asset First Cost Initial Operating Cost A $135.000 B$135,000 $30,000 $30,000 90000 a. Determine the economic lives for assets A and B. b. Create a diagram showing the EAC(capital), the EAC(operating), and the EAC(total) for assets A and B c. Explain the difference in economic life between A and B. Click the icon to view the table of compound interest factors for discrete compounding periods when i-5%. Total [ a. The economic life of asset A is years, and the economic life of asset B is years. (Type whole numbers.) b. Create a diagram for asset A. Choose the correct diagram below. OA Rate of Operating Cost Increase Q Maintenance …………………………êões a 12.5%/year 12.5%/year MARR 5% 25% OB 90000₂ Total 4444444 ******** Maintenance

The following pair of assets differ only in the MARR. The problem asks you to determine the effect of this difference on the economic life and to explain the result. All assets dedine in value by 20 percent of current value each year Ins follows. Asset First Cost Initial Operating Cost A $135.000 B$135,000 $30,000 $30,000 90000 a. Determine the economic lives for assets A and B. b. Create a diagram showing the EAC(capital), the EAC(operating), and the EAC(total) for assets A and B c. Explain the difference in economic life between A and B. Click the icon to view the table of compound interest factors for discrete compounding periods when i-5%. Total [ a. The economic life of asset A is years, and the economic life of asset B is years. (Type whole numbers.) b. Create a diagram for asset A. Choose the correct diagram below. OA Rate of Operating Cost Increase Q Maintenance …………………………êões a 12.5%/year 12.5%/year MARR 5% 25% OB 90000₂ Total 4444444 ******** Maintenance

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Problem 2 Consider the following sets of investment projects n(years) A($) B($) C($) D($) 0 -3,500 -5,800 -5,200 -40,000 1 600 3,000 2,000 12,000 2 600 2,000 4,000 14,000 3 1,000 1,000 2,000 18,000 4 1,000 500 4,000 18,000 5 1,000 500 2,000 14,000 Compute the equivalent annual worth of each project at i-10% and determine the acceptability of each project.
2. Two alternatives, a flexible manufacturing cell and fixed automation, have different cost and revenue characteristics as follows: Flexible Cell Fixed Automation Investment S2,500,000 б уears S800,000 in first year; increasing by $100,000 each year thereafter $300,000/year $1,500,000 3 years S800,000/year Life Gross cash savings s100,000 in the first year; decreasing to S80,000 in second year and S70,000 in third year Cash disbursement MARR 20% 20% Assuming "repeatability" and service needed for 6 years, show which alternative is preferred using the method of rate of return.
Siemens AG invests €80,000,000 to build a manufacturing plant to build wind turbines. The company predicts net cash flows of €16,000,000 per year for the next 8 years. Assume the company requires an 8% rate of return from its investments. (PV of $1. FV of $1. PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your present value factor to 4 decimals.) (1) What is the payback period of this investment? (2) What is the net present value of this investment? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What is the payback period of this investment? Payback Period Choose Numerator: 1 1 Choose Denominator: ‒‒‒ www Next >
A manufacturer purchased $15,000 worth of equipment with a useful life of six years. Assuming 12% interest, the equivalent uniform annual cost of the equipment is _________. A. $1,625 B. $1,252 C. $2,500 D. $3,648 E. $5,049 Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure.
structions a learning assessment on the recorded discussion about investment decisions and ng the learning materials uploaded last week, answer the following, in good form: 1. A company considers purchasing a new machine that costs P600,050.00. It is projected that the machine will have a 3-year useful life, with no salvage value. The company is expected to generate P200,020.00 in annual cash flows net of taxes. The expected discount rate on capital is 11% and the tax rate is at 32%. 1. Determine the NPV. 2. Based on the NPV, should the company make the purchase?
Rerform an EAC analysis and evaluate what decision to make regarding 2 challengers and 1 defender. Elaborate:a) Graphsb) EAC analysisc) Conclude the exercise and make a decision regarding the results Machine N1 (#1 challenger) useful life = 8 years Initial Cost $15,000 MARR 18% Year Operating costs Market value EAC 1 $ 355.00 $ 8,000.00 2 $ 500.00 $ 7,000.00 3 $ 788.00 $ 6,000.00 4 $ 1,000.00 $ 5,000.00 5 $ 1,355.00 $ 4,000.00 6 $ 1,688.00 $ 3,000.00 7 $ 2,012.00 $ 1,000.00 8 $ 2,345.00 $ 0.00
A project has the cash flows shown in the cash flow diagram below, where the time periods are in years and all cash flows occur at once at the end of each year. What is the project's conventional payback period in years? a. 1 year b. 2 years c. 3 years d. 4 years e. 5 years $20K $20K $15K $15K TH 1 2 3 4 $10K $25K 5
5. A small branch office of a contracting company is planning to purchase a new laser printer. Three vendors have supplied cost, useful life, and estimated salvage value data, shown in the following table. The MARR is 12%. Investment (first) cost Annual service cost Salvage value Useful life A $800 $180/yr $200 5 years Laser printer B $1,400 $150/yr $825 5 years C $900 $170/yr $100 5 years Draw cash flows for these alternatives. If the expected annual saving in labor is $500 regardless of which machine is purchased, what are the annual equivalent values of these alternatives.
1. An industrial plant is considering the purchase of a centrifugal pump. Three offers were received and basis of selection have been tabulated as follows: Offer A Offer B Offer C Price of pump P60,000 P96,000 P120,000 Economic life, years 3 5 10 Salvage value at end of economic life 5,000 10,000 8,000 Yearly maintenance cost 10,000 6,000 5,000 . If cost of money is 14%, what offer would you recommend to be purchased? Use the rate of return method, the annual cost method, present worth method and equivalent uniform annual cost method for the evaluation Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.