Three mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are given next. TheMARR is 20% per year. At the conclusion of the useful life, the investment will be soldAB$28,000$55,000CapitalInvestmentAnnualExpensesAnnualRevenuesMV at EOY 10Useful lifeACapital InvestmentAMarket ValueAAnnual Income (REV - EXP)Blank 115,000AIRR23,0004 PW6,0008,00010,00010 years10 years10 yearsUse incremental analysis to determine the best alternative on the basis of PW method & IRR method.Is increment justified?13,00028,000Blank 1Blank 4Blank 7Blank 10Blank 13%Blank 16C$40,000Blank 1922,00032,000Blank 2Blank 5Blank 8Blank 11Blank 14%Blank 17Blank 20Blank 3Blank 6Blank 9Blank 12Blank 15%Blank 18Blank 21

Present value refers to the concept that states an amount of money today is valued more than that…

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 A B C $28,000 $55,000 $40,000 Capital Investment Annual Expenses Annual Revenues 15,000 MV at EOY 10 Useful life 23,000 13,000 28,000 22,000 6,000 8,000 10,000 10 years 10 years 10 years Use incremental analysis to determine the best alternative on the basis of PW method & IRR method. Blank 1 32,000 Blank 2 Blank 2

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 A B C $28,000 $55,000 $40,000 Capital Investment Annual Expenses Annual Revenues 15,000 MV at EOY 10 Useful life 23,000 13,000 28,000 22,000 6,000 8,000 10,000 10 years 10 years 10 years Use incremental analysis to determine the best alternative on the basis of PW method & IRR method. Blank 1 32,000 Blank 2 Blank 2

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

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
A
B
$28,000
$55,000
Capital
Investment
Annual
Expenses
Annual
Revenues
MV at EOY 10
Useful life
ACapital Investment
AMarket Value
AAnnual Income (REV - EXP)
Blank 1
15,000
AIRR
23,000
4 PW
6,000
8,000
10,000
10 years
10 years
10 years
Use incremental analysis to determine the best alternative on the basis of PW method & IRR method.
Is increment justified?
13,000
28,000
Blank 1
Blank 4
Blank 7
Blank 10
Blank 13%
Blank 16
C
$40,000
Blank 19
22,000
32,000
Blank 2
Blank 5
Blank 8
Blank 11
Blank 14%
Blank 17
Blank 20
Blank 3
Blank 6
Blank 9
Blank 12
Blank 15%
Blank 18
Blank 21

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An economic evaluation of the following mutually exclusive alternative equipment is being conducted. Since the equipment have different service lives, repeatability is assumed using an analysis period of 30 years. The MARR is 6% per year. Capital investment Annual revenues generated Useful life Market (salvage) value The net Annual worth of Alternative B over the analysis perio A. $39,267 More Info Alternative A B $30,000 $90,000 $20,000 $30,000 10 years None 15 years None Discrete Compounding; 1=6% Single Payment OB. $23,462 Compound OC. $16,923 Amount Present Compound Amount Present Factor Worth Factor OD. $41,466 To Find F To Find P Factor To Find F Worth Factor Uniform Series Sinking Fund Factor Capital Recovery Factor To Find P OE. $20,733 Given P Given F Given A Given A Given F To Find A To Find A Given P N F/P P/F F/A P/A A/F A/P 1 1.0600 0.9434 1.0000 0.9434 1.0000 1.0600 The net Present worth of Alternative B over the analysis perio 2 1.1236 0.8900 2.0600 1.8334 0.4854 0.5454…
I need the answer in 10 minutes please
Question 1 A design firm is considering multiple independent projects for the upcoming quarter. For a MARR of 6.5% per quarter. What is your recommendation to the company based on a PW analysis? Project Initial Payment Monthly Costs (Today) A $1,500,000 $170,000 B $245,000 $200,000 C $300,000 $150,000 Payments are inflows for the design firm. Costs are outflows for the design firm. Payment at month 12 of $1,000,000 Costs at month 9 of $100,000 None Final Payment (At end of project) $3,000,000 Project Length Other Cash flows 2 years $3,000,000 18 months $4,000,000 30 months
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
11
Given the following two mutually exclusive alternatives and using repeatability assumption, the correct equation for computing the CW of alternative B is. MARR-15% / year. Capital Investment, $ Market value, $ Annual Expenses, $ Useful life (years) Alternative A -12.000 0 -2,200 10 O CW(15%)-(-40,000-100-(P/A, 15%, 25)+10000(P/F, 15 %. 25))*0.15 O CW(15 %)-(-40,000(A/P. 15%, 25)-1000+10,000(A/F. 15%, 25))/0.15 OCW(15%) - (-40,000(A/P. 15%, 25)-1000+10,000(A/F, 15%, 25))*0.15 OCW(15%)-(-40,000-100-(P/A, 15%, 25 ) +10000 (P/F, 15%, 25))"0.15 Alternative B -40.000 10,000 1,000 25
D2
Question 2 Full explain this question and text typing work only do not ignore this line
what's the PW of Alternative A and B?
Three mutually exclusive alternatives are being considered. A B C Initial Investment $50,000 $22,000 $15,000 Annual Net Income $5,093 $2,077 $1,643 Rate of Return 8% 7% 9% Each alternative has a 20-year useful life with no salvage value. If the MARR is 7%, which alternative should be selected? (ANS: ∆IRRB-C=2.14%, Eliminate B, ∆IRRA-C=7.56%, Select A) How do you work this out?
A newly constructed bridge costs $15,000,000.The same bridge is estimated to need renovationevery 15 years at a cost of $3,000,000. Annual repairsand maintenance are estimated to be $1,000,000 peryear.(a) If the interest rate is 5%, determine the capitalized cost of the bridge.(b) Suppose that in (a), the bridge must be renovatedevery 20 years, not every 15 years. What is thecapitalized cost of the bridge?(c) Repeat (a) and (b) with an interest rate of 10%.What can you say about the effect of interest onthe results?
RESUELVA EL SIGUIENTE PROBLEMA Investment Annual operating Cost. Began first (1)year until the 6th year (A=$1,500) Annual Revenues: Began first (1¹h)year until the 6th year. Additional Revenues: Gradient beginning 2nd year G= $800 until the 6th year. Salvage Value at the end of 6th year or MV8= $2,000 Investment life n=6 years. MARR=6% $10,000 1,500 2,500 G=$800 MV6= $2,000 a. Draw the cash flow diagram b. PW, AW and FW Determine if the investment is viable or not. c. IRR d. ERR