The four alternatives described below are being evaluatedAlternativeAABCDInvestmentIRR$200,00015%$75,00016%$40,00029%$100,00017%Other information:IRRB-C = 5%; IRRD-B = 19%; IRRD-C = 7%;IRRA-D=13%; IRRA-B = 14%; IRRA-C=11%1. If these alternatives are mutually exclusive, which one should be selected ifMARR=10%? Clearly show your steps for full credit.

Detailed explanation:Step 1: List the Alternatives and their IRRsAlternative A: IRR=15%Alternative…

Answered: The four alternatives described below…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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There are three alternatives X,Y,Z. With 10% MARR, which alternative should be chosen based on following conditions and why? For X, initial cost is $10k, yearly revenue is $6K, Salvage is $1k and useful life is calculated as 2yrs. For Y, initial cost is $15k, yearly revenue is $10K, Salvage is -$2k and useful life is calculated as 3yrs. For Z, initial cost is $12k, yearly revenue is $5K, Salvage is $3k and useful life is calculated as 4yrs.
5) ) Use a MARR of 10%, useful life of 5 years and the Present Worth method to select between the investment alternatives below. Alternative A B Capital investment $90,000 $115,00 Annual revenues less $38,000 $45,000 expenses
There are two alternatives P,M. With 15% MARR under 20 years study period, which alternative should be chosen based on the following conditions and why ? For P, initial cost is $14k, yearly cost is $14k, Salvage is $8k and useful life is calculated as 5 years. For M, initial cost is $65k, yearly revenue is $9k, Salvage is $13k and useful life is calculated as 20 years.
The estimated negative cash flows for three design alternatives are shown below. The MARR is 10% per year and the study period is four years. Which alternative is best based on the IRR method? Doing nothing is not an option. Capital investment Annual expenses OA. Alternative B OB. Alternative C OC. Alternative A EOY 0 1-4 A $85,700 8,500 Alternative B $64,500 Which alternative would you choose as a base one? Choose the correct answer below. 15,150 C $71,900 12,450
You are faced with making a decision on a large capital investment proposal. The capital investment amount is $640,000. Estimated annual revenue at the end of each year in the eight year study period is $180,000. The estimated annual year-end expenses are $42,000 starting in year one. These expenses begin decreasing by $4,000 per year at the end of year four and continue decreasing through the end of year eight. Assuming a $20,000 market value at the end of year eight and a MARR = = =12% per year, answer the following questions. a). Using AW, determine whether this proposal is acceptable.
Could you please tell me answer to this question, a circled or highlighted answer would be appreciated, thank you.
The MARR is 15%. Three alternatives are available and the associated cash flow is as follow: Year First Cost A B C $1,700 $2,100 $3,750 Annual Benefit Useful Life 2 $1,000 $1,000 $1,000 3 6 Answer the following in this format: 1.23 1. The payback period for Alternative A is 2. The payback period for Alternative B is 3. The payback period for Alternative C is Based on Payback period analysis, Alternative should be selected. (Enter only the letter)
explain please
Q4. The cash flow details of a public project is as follows = BD 250000 Initial cost /investment Annual benefits/revenues = BD 120000 Worth of annual cost Salvage value Interest rate per year 8% and useful lie 30 Years Use the three project evaluation methods( PW, FW, AW) = BD 12,000 = BD 150000
Which of the following interpretations would be best for the scenario analysis results shown below? Worst- case PW (18%) -$650,000 IRR 2.10% Most- likely case Best-case $58,000 $2,660,000 33% 14.60% a. Since the most-likely case has a PW <0, the project should be abandoned immediately b. Since the worst-case has a negative present worth, this project must be rejected. c. Since the average of the three cases is a positive present worth, the project is acceptable. d. Because only one of the scenarios shows the project as profitable, the project should be considered very risky, and, if accepted, should be subject to greater scrutiny in its planning and forecasting.
The table below summarizes the comparison between four mutually exclusive alternatives using the IRR method. The MARR is 10%. Which alternative should be the base aftemative in the first step of the incremental analysis? Alternative Initial Cost Annual Income IRR P $110,000 $21.500 14.5% Q $130,000 $31,200 20.2% OA Atemative R because it has the lowest initial cost OB. Alternative 5 because it has the largest initial cost OC. Allamative Q because it has the highest IRR D. Alemative P because it has the lowest IRR R $95,000 $20,000 16.5% $ $354,000 $74,000 16.3%
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

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