Three mutually exclusive design alternatives are being considered. The estimated cash flows foreach alternative are given next. The MARR is 20% per year. At the conclusion of the useful life, theinvestment will be sold.Investment CostAnnual ExpensesAnnual RevenuesMarket ValueUseful LifeIRRAP28,000,000P15,000,000$23,000,000P6,000,00010 years26.4%BP55,000,000$13,000,000P28,000,000P8,000,00010 years24.7%CP40,000,000$22,000,000$32,000,000P10,000,00010 years22.4%A decision-maker can select one of these alternatives or decide to select none of them. Make arecommendation using the methods discussed in Unit 3.

Present worth establishes the value of a number of potential periodic payments at a specific point…

Three mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are given next. The MARR is 20% per year. At the conclusion of the useful life, the investment will be sold. Investment Cost Annual Expenses Annual Revenues Market Value Useful Life IRR A P28,000,000 P15,000,000 P23,000,000 P6,000,000 10 years 26.4% B P55,000,000 P13,000,000 P28,000,000 P8,000,000 10 years 24.7% C P40,000,000 P22,000,000 P32,000,000 P10,000,000 10 years 22.4% A decision-maker can select one of these alternatives or decide to select none of them. Make a recommendation using the methods discussed in Unit 3.

Three mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are given next. The MARR is 20% per year. At the conclusion of the useful life, the investment will be sold. Investment Cost Annual Expenses Annual Revenues Market Value Useful Life IRR A P28,000,000 P15,000,000 P23,000,000 P6,000,000 10 years 26.4% B P55,000,000 P13,000,000 P28,000,000 P8,000,000 10 years 24.7% C P40,000,000 P22,000,000 P32,000,000 P10,000,000 10 years 22.4% A decision-maker can select one of these alternatives or decide to select none of them. Make a recommendation using the methods discussed in Unit 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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Compute for the Annual Worth of MEA1 and explain. Compute using the Annual Worth formula and WITHOUT using Excel sheets. Thank you. MARR = 12%
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.
Please show ALL the steps and required formulas and make sure the answer is CORRECT! Thank you for your help!
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A $40,000 machine will be purchased by a company whose interest rate is 12% APR, compounded daily. The installation cost is $5.000 and disposal costs are insignificant. If needed, use an MARR to 2 decimal places. Algebraic signs matter! EOY MV(N), $ O&M, $/yr. years 1 30,000 dollars, $ 10,000 2 dollars, $ 24,000 13,500 b. What is the associated EUAC (TAW) for the ESL? 3 21,000 16,000 4 17,500 a. Based on the problem data, what is the economic service life, ESL, of the machine? 17,000 5 10,000 21,000 c. If the machine is kept in service to the ESL calculated in part a, what is the TAW for using the machine in EOY 1?
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.
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A firm is considering three mutually exclusive alternatives as part of an upgrade to an existing transportation network. Installed cost $40,000 $6,400 $30,000 $20,000 Net annual revenue $5.650 $5,250 Salvage value Useful life 20 years 20 years 10 years Calculated IRR 15.0% 18.2% 22.9% At EOY 10, alternative NI would be replaced with another alternative having the same installed cost and net annual revenues. If MARR is 10% per year, which alternative (if any) should be chosen? Use the incremental IRR procedure. Arrange (rank order) the teasible alternatives to use the incremental IRR procedure (Hint DN indicates "do nothing" alternative). Choose the correct answer below O A. I, I, I, DN O B. DN, I, N, NI Oc. DN, ,N, O D. DN. .I Perform the incremental IRR Analysis. Fil-in the table below (Round to one decimal place) Incremental Alternative to be Investment Inc. IRR selected
A start up business is considering two types of equipment data are as follows: TYPE A TYPE B First Cost P200,0p0.00 32,000.00 P300,000.00 Annual operating cost 24,000.00 Annual labor cost 50,000.00 32,000.00 Insurance and property taxes 3% 3% Payroll taxes 4% 4% Estimated life 10 10 The minimum required rate of return is 15%. Using present worth cost method, determine the value of alternative A and alternative B: ANSWER for ALTERNATIVE A: Blank 1 ANSWER for ALTERNATIVE B: Blank 2