Three different plans were presented to the Ahbhalet Corporation for operating an identity-theft scanning system. Plan A involves enewable 1-year contracts with payments of $1.1 million at the beginning of each year. Plan B is a 2-year contract that requires four Dayments of $360,000 each, with the first one made now and the other three at 6-month intervals. Plan C is a 3-year contract that entails payment of $3.5 million now and the second payment of $0.5 million 2 years from now. Assuming that the company could enew any of the plans under the same payment conditions, determine which plan is best on the basis of a PW analysis at a MARR of 5% per year compounded semiannually. The present worth of plan A is $ The best plan on the basis of the present worth analysis is plan B the present worth of plan B is $ and the present worth of plan C is $

Three different plans were presented to the Ahbhalet Corporation for operating an identity-theft scanning system. Plan A involves enewable 1-year contracts with payments of $1.1 million at the beginning of each year. Plan B is a 2-year contract that requires four Dayments of $360,000 each, with the first one made now and the other three at 6-month intervals. Plan C is a 3-year contract that entails payment of $3.5 million now and the second payment of $0.5 million 2 years from now. Assuming that the company could enew any of the plans under the same payment conditions, determine which plan is best on the basis of a PW analysis at a MARR of 5% per year compounded semiannually. The present worth of plan A is $ The best plan on the basis of the present worth analysis is plan B the present worth of plan B is $ and the present worth of plan C is $

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

You plan to invest $3,500 per year for 39 years into an IRA. What will the value of the IRA be after 39 years if the interest rate is 9% per year? Your answer may vary due to rounding. A) $1,081,733 B) $37,539 C) $148,785 D) $1,182,589
just subparts iii, and iv. spreadsheet atttached thank you
If negotiable orders of withdrawal were $2793 higher and saving deposits were $3602 higher, M2 would be $ higher.
To attract new customers, EP Employees Credit Union advertised that they will begin paying 3% interest every quarter on all savings accounts. (Their competitors pay interest every 6 months.) The credit union uses March 31st, June 30th, September 30th, and December 31st as quarterly interest periods. Determine (a) the end-of period totals in the account, and (b) the interest paid each quarter on the total. Assume there are no withdrawals and that quarterly interest is not redeposited. Month Deposit, $ Jan 50 Feb 70 Mar 0 Apr 120 May 20 June 0 July 150 Aug 90 Sept 0 Oct 40 Nov 110 Dec 0
Since many U.S. Navy aircraft are at or near their usual retirement age of 30 years, military officials want a precise system to assess when aircraft should be taken out of service. A computational method developed at Carnegie Mellon maps in 3-D the microstructure of aircraft materials in their present state so that engineers can test them under different conditions of moisture, salt, dirt, etc. Military officials can then determine if an aircraft is fine, is in need of overhaul, or should be retired. If the 3-D system allows the Navy to use one airplane 2 years longer than it normally would have been used, thereby delaying the purchase of a $20 million aircraft for 2 years, what is the present worth of the assessment system at an interest rate of 8% per year?
Three different plans were presented to the Ahbhalet Corporation for operating an identity-theft scanning system. Plan A involves renewable 1-year contracts with payments of $1.2 million at the beginning of each year. Plan B is a 2-year contract that requires four payments of $380,000 each, with the first one made now and the other three at 6-month intervals. Plan C is a 3-year contract that entails payment of $1.5 million now and the second payment of $0.5 million 2 years from now. Assuming that the company could renew any of the plans under the same payment conditions, determine which plan is best on the basis of a PW analysis at a MARR of 6% per year compounded semiannually. The present worth of plan A is $ The best plan on the basis of the present worth analysis is plan C the present worth of plan B is $ and the present worth of plan C is $1830000
Medtronic Inc. has an opportunity to supply medical devices to Memorial Hermann, a prívate hospital in the United States. Memorial Hermann will pay $4 million upfront i.e. when the contract is signed and $3 million for the first year, $1.5 million for the second year and $7.5 million for the third had obtained loan from Bank of America Merrill Lynch (an investment bank) prior to the initial payment from Hermann and invest $2 million from it at the beginning of the project. Subsequently, Medtronic spend $3.5 million, $10 million, $1.5 million, 4 million, and $3 million as running cost for the first, second, third, fourth and fifth year respectively. Memorial Hermann will take delivery of the medical devices during year 4, and agrees to pay $4.25 million at the end of that year and the $ 4.5 million balance at the end of year 5. The outcome of the rate of return on this investment as compare with the minimum attractive rate of return (MARR) will determine if Medtronic will continue to…
Three different plans were presented to the Ahbhalet Corporation for operating an identity-theft scanning system. Plan A involves renewable 1-year contracts with payments of $1.5 million at the beginning of each year. Plan B is a 2-year contract that requires four payments of $600,000 each, with the first one made now and the other three at 6-month Intervals. Plan C is a 3-year contract that entails payment of $3.1 million now and the second payment of $0.5 million 2 years from now. Assuming that the company could renew any of the plans under the same payment conditions, determine which plan is best on the basis of a PW analysis at a MARR of 6% per year compounded semiannually. The present worth of plan A is $ 1500000], the present worth of plan B is $ The best plan on the basis of the present worth analysis Is (Click to select) and the present worth of plan C is $[
Determine the following for the quarterly cash flow estimates. (a) i* value or values; (b) if an MARR of 5% per quarter is achievable; and (c) the minimum revenue in quarter 8 that will generate an i* that meets the MARR. Quarter Expenses, $ Revenues, $ 0 −20 0 1 −20 5 2 −10 10 3 −10 25 4 −10 26 5 −10 20 6 −15 17 7 −12 15 8 −15 2
You are planning to make 18 monthly withdrawals beginning at the end of the sixth month. You plan to withdraw $113 in the sixth month and increase your withdrawals by $17 over the previous month’s withdrawal. How much should you deposit now in a bank account that pays 12% per year compounded monthly? Hint: Determine m and k and use the decision tree to find how you must setup the cash flow equation. Remember to bring all the cash flows to the proper time period required to answer this question.
If you receive a $5000 bond as a graduation present and the bond will pay you $75 interest every 3 months for 20 years, what is the bond coupon rate?
Jennifer and Rex both receive a dividend from their 401(k) retirement plan every 6 months. The earning rates for this year have been 5% per year, compounded quarterly for Jennifer, and 4.85% per year, compounded monthly for Rex. Rex felt good about this because he knew the monthly compounding on his plan would make his APY higher than Jennifer’s APY. (a) Is Rex correct? Explain your answer. (b) What is the effective rate for each plan on the basis of the payment period?