The General Hospital is evaluating new office equipment offered by fourcompanies. The useful life of the equipment is 5 years.First costMaintenance andoperating cost(annual)Annual benefitSalvage valueCompany A Company B Company C Company D$15,000$18,000$25,000$20,0001,6001,1003055204075003,0009,0003,50040013,0006,000The internal rate of return for Company A is close to (%)90011,0004,500

The Internal Rate of Return (IRR) is a financial metric utilized to determine the profitability of…

The General Hospital is evaluating new office equipment offered by four companies. The useful life of the equipment is 5 years. First cost Maintenance and operating cost (annual) Annual benefit Salvage value 030 55 20 Company A Company B Company C Company D $15,000 $18,000 $25,000 $20,000 1,100 40 1,600 7500 3,000 9,000 3,500 400 The internal rate of return for Company A is close to (%) 13,000 6,000 900 11,000 4,500

The General Hospital is evaluating new office equipment offered by four companies. The useful life of the equipment is 5 years. First cost Maintenance and operating cost (annual) Annual benefit Salvage value 030 55 20 Company A Company B Company C Company D $15,000 $18,000 $25,000 $20,000 1,100 40 1,600 7500 3,000 9,000 3,500 400 The internal rate of return for Company A is close to (%) 13,000 6,000 900 11,000 4,500

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

PART 2 - C PROBLEM SOLVING PROBLEM NO.4 Compute for the CR Amount: $3500 market Value productivity attributable to equipment per year (operating costs have afready been deducted from the revenue) $8500 $8500 $8500 $8500 $8500 1 2 3 4 5 End of Year i= 25%/yr $23500 investment Cost
F1
A company is considering the following two alternatives: Alt. 1 $42,500 6,000 18,500 12,000 1.5 years Alt. 2 $70,000 First cost Annual maintenance Annual savings Salvage value Useful life 4,000 20,000 25,000 3 years If interest is 20% per year, which alternative is preferred?
Use Present Worth Analysis to determine whether Alternative A or B should be chosen. Items are identically replaced at the end of their useful lives. Assume an interest rate of 6% per year, compounded annually. Alternative A Alternative B Initial Cost Annual Benefit Salvage Value Useful Life (yrs) 400 40 170 2 1,000 48 257 3 O Alternative A, because it costs $736.29 less than Alternative B, in terms of present worth Alternative B, because it costs $736.29 more than Alternative A, in terms of present worth Alternative A, because its present worth is positive Alternative B, because it only incurs the initial cost once every three years instead of every two years
6-30 The Johnson Company pays $1700 a month to a trucker to haul wastepaper and cardboard to the city dump. The material could be recycled if the company were to buy a $48,000 hydraulic press baler and spend $21,000 per year for labor to operate the baler. The baler has an estimated useful life of 15 years and no salvage value. Strapping the material would cost $1500 per year for the estimated 600 bales a year that would be produced. A wastepaper company will pick up the bales at the plant and pay Johnson $27 per bale for them. Use an annual cash flow analysis and an interest rate of 8 % to recommend whether it is economical to install and operate the baler.
D-66 A cash flow series is described by the following: $10,000+ $250(1), where t is the number of com- pounding periods. The present worth of this series at the end of five periods, where interest is 2% per t, is nearest what value? (a) $11,250 (b) $50,620 (c) $56,432 (d) $60,620 les of a training video for the first Show Transcribed Text Show all steps please
Need help.
In comparing the machines on a present worth basis, the present worth of machine Q is closest to:a. $-68,445b. $-97,840c. $-125,015d. $-223,120
Baguio Rabbitry must replace the piping system in its barn. Based on cost of capital of 12% which of the two following alternatives should be chosen using the following methods? a) RORAI b) AW c) PW Pamper pipes P 75,000 Fluid Flush P 90,000 First Cost Operating costs per 5,000 4,000 year Savings per year Salvage value 1,000 2,000 2,000 Useful life 10 10
2s.6 State the value of C that makes the following two cash flow transactions eco- nomically equivalent at an interest rate of 12% $100 $100 (a) $29.365 (b) $33.598 (c) $47.433 (d) $43.796 $50 $50 3 3C 3C A A 2 3 C DOCOunt
4.39 A new machine is expected to cost $6000 and have a life of 5 years. Maintenance costs will be $1500 the first year, $1700 the second year, $1900 the third year, $2100 the fourth year, and $2300 the fifth year. How much should be deposited in a fund that earns 9% per year, compounded monthly, in order to pay for this machine? Ans. $13 180
A firm is considering the following alternatives, as well as a third choice: do nothing. Each alternative has a 5-year useful life. The firm's minimum attractive rate of return is 8%. Which alternative should be selected? Initial Cost Annual Benefit 1 $130,000 38,780 2 $330,000 91,550