Three alternatives are being considered for the production of equipment at a tissue factory. The estimated cash flows for each alternative are given below. Use MARR = 15% Capital Investment Annual Revenues Annual Costs Market Value at the end of the Useful Life Useful life (in Years) A $ 2,000 3,200 2,100 100 10 B 7,000 8,000 5,100 600 10 C 4,200 6,000 4,000 420 10 Compute for the following: a. Capital Recovery of Alternative A = $ Blank 1 b. Using co-terminated assumption, what is the Imputed Market Value @ Yr. 5 of Alternative B = $ Blank 2 c. The best alternative using incremental Analysis (Type if A, B or C) = Blank 3

Three alternatives are being considered for the production of equipment at a tissue factory. The estimated cash flows for each alternative are given below. Use MARR = 15% Capital Investment Annual Revenues Annual Costs Market Value at the end of the Useful Life Useful life (in Years) A $ 2,000 3,200 2,100 100 10 B 7,000 8,000 5,100 600 10 C 4,200 6,000 4,000 420 10 Compute for the following: a. Capital Recovery of Alternative A = $ Blank 1 b. Using co-terminated assumption, what is the Imputed Market Value @ Yr. 5 of Alternative B = $ Blank 2 c. The best alternative using incremental Analysis (Type if A, B or C) = Blank 3

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 4 Which increment should be examined first in incremental rate of return analysis, if MARR = 9.0%? Do-nothing A First cost Annual benefit Life ROR A-B O A-C O B-C OB-A 0 0 10 yrs $5,500 895 10.0% B C $3,000 $7,000 531 1,164 12.0% 10.5% D $3,000 408 6.0%
A project is being planned that has an initial investment at time 0, annual revenuesand expenses, and a salvage value at the end of the project lifespan (20 years). The financialvalues are summarized below:Initial investment amount at time 0 $150,000Estimated annual revenue $34,500 per yearEstimated annual expenses $8,700 per yearEstimated salvage value at end of lifespan $10,000Minimum attractive rate of return (MARR) 15%a. Calculate the capital recovery amount CR(i%).b. Using the annual worth (AW) method, determine whether purchasing the equipmentis economically justified.c. Repeat part (a) using the internal rate of return (IRR) method based on annual worth(AW).d. Using the present worth (PW) method, determine the break-even time period afterwhich purchase of the equipment generates a profit. (Find N when PW = 0) year period.
With the given information please calculate NPV, NPW, EUAW, and IRR for each alternative. The interest rate is 15%
Show me the cash flow diagram of the attached problem below.Thank you!
MARR 20% EOY Cash Flow 0 $(70,000.00) 1 $ 20,000.00 2 $ 19,000.00 3 $ 18,000.00 4 $ 17,000.00 5 $ 16,000.00 6 $ 15,000.00 7 $ 14,000.00 8 $ 13,000.00 9 $ 12,000.00 10 $ 11,000.00 11 $ 10,000.00 12 $ 9,000.00 13 $ 8,000.00 14 $ 7,000.00 15 $ 6,000.00 16 $ 5,000.00 17 $ 4,000.00 18 $ 3,000.00 19 $ 2,000.00 20 $ 1,000.00 Plot a graph of FW versus MARR, where MARR varies from 0 percent to 50 percent by 1 percent increments.FW should be on the y-axis and MARR on the x-axis. How do you find FW? Please show all steps and formulas used in excel format. Thank you!
MARR 20% EOY Cash Flow 0 $(70,000.00) 1 $ 20,000.00 2 $ 19,000.00 3 $ 18,000.00 4 $ 17,000.00 5 $ 16,000.00 6 $ 15,000.00 7 $ 14,000.00 8 $ 13,000.00 9 $ 12,000.00 10 $ 11,000.00 11 $ 10,000.00 12 $ 9,000.00 13 $ 8,000.00 14 $ 7,000.00 15 $ 6,000.00 16 $ 5,000.00 17 $ 4,000.00 18 $ 3,000.00 19 $ 2,000.00 20 $ 1,000.00 Plot a graph of FW versus MARR, where MARR varies from 0 percent to 50 percent by 1 percent increments.FW should be on the y-axis and MARR on the x-axis.
What is the best alternative using incremental Analysis? Use MARR = 15% A B C Capital Investment $ 2,000 7,000 4,200 Annual Revenues 3,200 8,000 6,000 Аппиal Costs 2, 100 5, 100 4,000 Market Value at the end of useful life 100 600 420 Useful Life (in years) 10 10 10 The correct ranking of Alternative is Blank 1 Select Alternative Blank 2 Note: Do not put comma, unit of measure and limit your answer to two decimal places. Ex: A-B-C
Calculate the annual worth uniform series in years 1 through 10 for the following incomes and expenses, If the interest rate is 1596 per year. Expense, S/Year 10,000 2,000 Year Income, S/Y ear 1-6 7,000 7-10 1,000 2,000 Selected Answer: 3 [None Given] Correct Answer: $1,532
Would love some help on how to approach this - thanks! The cash flows for three different alternatives are given in table below. MARR = 10%. Initial cost Annual benefits ROR Life in years Alt. A Alt. B Alt. C $5,000 9,000 7,500 $1,457 2,518 2,133 14% 13% 12.4% 1. AROR for the first increment (Alt. C-Alt. A) is A.10.12% B. 9.38% A. Alt. C 5 2. AROR for the second increment is A. 10.12% B. 9.38% B. Alt. A C. 11.85% D. 11.00% C. 8.94% 3. The best alternative for a MARR of 10% using the incremental rate of return analysis is D. Do nothing D. 9.87% C. Alt. B
The cash flows for three mutually exclusive alternatives are given in table below. MARR = 4%. ALB Alt. C 27,000 24,000 7,600 6,500 13% 11% Initial cost Annual benefits ROR Life in years Alt. A $15,000 $4,500 15% 5 Reference: Case Study 8 The best alternative for a MARR of 2.0% using the incremental rate of return analysis is A. Alt. C B. Alt. B C. Alt. A OD.Do-nothing
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