Two alternatives are being considered as shown below. Based on an MARR of 7%, and an 8- year analysis period, select the best alternative. Assume identical replacement. A B Initial Cost (9,200) (5,000) Uniform Annual Benefit 1,850 1,750 4 Useful Life Analysis Period 8 8 8

Two alternatives are being considered as shown below. Based on an MARR of 7%, and an 8- year analysis period, select the best alternative. Assume identical replacement. A B Initial Cost (9,200) (5,000) Uniform Annual Benefit 1,850 1,750 4 Useful Life Analysis Period 8 8 8

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Related questions

Q: a) Benefit to Cost ratio analysis b) Payback Period Analysis

A: Benefit to Cost Ration Analysis: The Benefit-to-Cost Ratio (BCR) is a financial indicator showing…

Q: None

A: Calculate the present value of the uniform annual benefit for the useful life of 4 years:Calculate…

Q: Compare the following investment alternatives using ROR analysis. MARR is %12 per annum.…

A: Calculating the rate of the return of two methods. The NPW of alternative A: NPW = -240,000…

Q: A $1000 first year, then increasing $575 per year B C D $100 first year, then increasing $500 per…

A: We are provided with the initial and annual costs of 4 alternatives and we need to derive choice…

Q: Compare the following alternatives using a method of your choice. Rate 3.5% per year compounded…

A: For Alternative A:- Initial cost= $2,500,000 Maintenance cost= $75,000 Benefits= $450,000 Time= 12…

Q: Use Present Worth Analysis to determine whether Alternative A or B should be chosen. Items are…

A: The present worth of a project or investment refers to its value at present based on the associated…

Q: An investment of P2, 700, 000 can be made in a project that will produce a uniform annual revenue of…

A: Engineering economics, formerly engineering economy, is a branch of economics concerned with the…

Q: Plastics recycling equipment is estimated to cost $300K. It will increase profit by $75K per year…

A: Cost of Equipment 300000 Profit 75000 Upgrade Cost 50000 MARR 0.15 Life 8

Q: In a system of 100-percent-reserve banking, deposits are banks' only assets. currency is the only…

A: Total reserves refers to the sum of excess reserves and required reserves.

Q: Dexcon Technologies, Ic., is evaluating two alternatives to produce its new plastic filament with…

A: * SOLUTION :- (7) Given that ,

Q: Each of the five alternatives has 20-year useful lives. If the MARR is 8%, use incremental rate of…

A: Given MARR is 8%. Alternative selection using Incremental rate of return analysis: First of all drop…

Q: Perform a present worth analysis of equal service alternatives with the costs shown below, if the…

A: Here we calculate the present worth by using the MRR and conclude the final decision , so…

Q: Compare two alternatives, A and B, on the basis of a present worth evaluation using / = 8% per year…

A: The present worth of an annuity is the current value of future payments from an annuity, given a…

Q: The following data is available for three different alternatives. Assume an interest rate of 2% per…

A: Present worth, also known as present value or discounted value, is a fundamental concept in…

Q: 4 A process control manager is considering two robots to improve materlais-handling capacity in the…

A: Given that: A process control oversees considering two robots to improve materials - taking care of…

Q: A company is planning to expand its production operations, it has two alternatives which has the…

A: The equivalent annual worth analysis is a method in which the alternatives are compared on the basis…

Q: Following cash flows for alternatives X and Y at an interest rate of 10% per year. Initial cost, $…

A: To calculate the present worth (PW) of each machine, we need to find the net present value (NPV) of…

Q: 5. For the cash flows shown below, use an annual worth comparison to determine which alternative is…

A: Given: The Rate of Interest = 12% To Find: The best alternative using annual worth comparison

Q: 5. If the MARR is 12% per year, compare the alternatives shown below on the basis of a present-worth…

A: The measure that depicts the current value of the future cash flow stream or future money sum at a…

Q: Q2) A company invests in one of three alternatives which has the cash flow as represent in the table…

A: Details Investment Amount Revenue Cost Purchasing cost Salvage Value Life Project 1 2200000 400000…

Q: The following three mutually exclusive alternatives are to be compared using the present worth…

A: Given first cost of alternative X = 48000 Annual cost = 10600 Annual benefits = 36000 Salvage value…

Q: The following data is available for three different alternatives. Assume an interest rate of 9% per…

A: Present worth, in economics, means the concept of calculating the present value of future cash flows…

Q: A Cost $4000 $2000 $6000 $1000 S9000 Annual benefit 639 410 761 117 750 Useful life, in years 20 20…

A: MARR=6%

Q: Three alternatives are considered for project execution by a construction firm. The following cash…

A: Given, Three alternatives : Alternative A, Alternative B and Alternative C The Cashflow is given as…

Q: A sports wear factory has two alternative machines for producing jerseys. Costs are shown below.…

A: Given; For Machine X:- Initial Cost= P243000Salvage Value= P36450Operating Costs= P9500 per…

Q: A company is considering the following two alternatives: Alt. 1 $42,500 6,000 18,500 12,000 1.5…

A: Here we calculate the Net present worth of the both alternative and choose the best alternative so…

Q: Question 6 For alternatives shown in the table below and on the basis of their capitalized costs CC…

A: Definition of Capitalized Cost In a company's balance sheet, a capitalized cost is a benefit that is…

Q: Use Present Worth Analysis to determine whether Alternative A or B should be chosen. Items are…

A: The amount of money that, if invested today at a certain rate of compound interest, will exactly…

Q: For the cash flows shown, determine the incremental cash flow between machines B and A. Machine A В…

A: The net cash flow of every investment consists of an initial cost, next comes the operating cost…

Q: 6) Data for 2 alternatives are given below. If i = 10%, determine the cost of alternative A so that…

A: Given:

Q: In AW OF MACHINE A FIRST COST - 27056 ANNUAL COST - 12.786 Salvage value - 4172 Life year - 3…

A: Here we calculate the Annual Worth of the Machine A and B by using the given details , so the…

Q: The cash flows of two alternatives are given below. Determine the difference in the no-return…

A: We can calculate the payback period of both alternative firm , after that we can find the no return…

Q: If are you and to Company decide More than 2 alternatives of is frying investment Worth while,…

A: Present value refers to the value of a certain sum of money in the future or cash flows in the…

Q: Use inual Cost Analysis to determine whether Alternative A or B should be chosen. The analysis…

A: To determine the better alternative, we need to compare their Equivalent Annual Costs (EAC). Let's…

Q: Compare the alternatives C and D on the basis of a present worth analysis using an interest rate of…

A: Present worth helps to recognize the current value of money received or paid in the future,…

Q: Compare the alternatives shown below on the basis of their AW and determine which alternative should…

A: The rule for selecting alternatives based on annual worth: The alternative whose equivalent uniform…

Q: An economic evaluation of the following mutually exclusive alternative equipment is being conducted.…

A: An economic evaluation of the following mutually exclusive alternatives is being conducted.since in…

Q: Complete the following analysis of cost alternatives and select the preferred alternative. The study…

A: Initial Investment = 13,500 Annual Cost = 450 Salvage Value = 1,700

Q: For aternatives shown in the table below and on the basis of their capitalized.costs. CC and an…

A: Here we calculate the capitalized cost of the both machines by using the given information , so the…

Q: For the cash flows shown, use the capitalized cost analyses and an interest rate of 8% per year and…

A: Annual Worth is defined as the the equivalent uniform annual worth of all the estimated income and…

Q: Consider two air-conditioning systems with the cash flow estimates as given below. Use AW analysis…

A: Annual worth is the net of all the costs and benefits an investment or asset faces over a year. The…

Q: A Construction company may buy a new truck with a 10-year life. Interest is 5%. The cash flows for…

A: NPW is the abbreviation used for Net present worth or net benefits after discounting the cash flows…

Q: A cost analysis is to be made to determine what, if anything, should be done in a situation offering…

A: The alternative providing the highest net annual worth and the highest rate of return is to be…

Q: (engineering economic) Four alternatives with cash flows (million rupiah) as follows: Determine the…

A: A rate of return (RoR) is the net gain or loss of an investment over a specified time period…

Q: The city council of Morristown is considering the purchase of one new fire truck. The options are…

A: PW Analysis is used for determining the acceptability of the project on an economical basis.

Q: You have two machines under consideration for an improved automated wrapping process for Snickers…

A: The annual worth refers to the annual cash flow equivalent to all expected cash inflows and outflows…

Q: Compare the following alternatives on the basis c heir capitalized costs at i= 8% per year and selec…

A: Salvage value is the estimated resale value of an asset at the end of its useful life. It is…

Q: Each of the five alternatives has 20-year useful lives. If the MARR is 8%, use incremental rate of…

A: We have given the multiple revenue alternative and their internal rate of return values. Before…

Question

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Renewable And Exhaustible Natural Resources

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.

Similar questions

Engineering Economics . I hope For the solution as soon as possible
Please no written by hand
Hand written solutions are strictly prohibited
A dyeing and finishing plant is interested in acquiring a dyeing machine for the production of a new product. Three alternatives are being considered assummarized below. Which alternative should be recommended if the plant’sMARR (hurdle rate) is 15% per year using (a) the IRR method and (b) the annual worth method?
I need the answer as soon as possible
12.9 A three-year maintenance contract for a local computer network costs $4000. The network is expected to be needed for fifteen years and the maintenance contract will be purchased for the same price at the beginning of every three year period. If the interest rate is 6%, the present equivalent cost of the maintenance contract is nearest: (A) $12,950 (B) $14,500 (C) $15,400 (D) $16,000
Complete the following analysis of cost alternatives and select the preferred alternative. The s A D Сapital investment $15,000 S16,000 $13,000 $18,000 Annual costs Market value 250 300 500 100 1,000 1,300 1,750 2,000 at EOY 10 FW(12%) -$49,975 –$53,658 ??? –$55,660 tudy period is 10 years and the MARR = 12% per %3D year.
Just a and b please
The management of Brawn Engineering is considering three alternatives to satisfy an OSHA requirement for safety gates in the machine shop. Each gate will completely satisfy the requirement, so no combinations need to be considered. The first costs, operating costs, and salvage values over a 5-year planning horizon are shown below. End of Year Gate 1 Gate 2 Gate 3 0 -$15,000 -$19,000 -$24,000 1 -$6,500 -$5,600 -$4,000 2 -$6,500 -$5,600 -$4,000 3 -$6,500 -$5,600 -$4,000 4 -$6,500 -$5,600 -$4,000 5 -$6,500 + $0 -$5,600 + $2,000 -$4,000 + $5,000 Show the comparisons and internal rates of return used to make your decision:Comparison 1: (Gate 1 versus Gate 3 or Gate 2 versus Gate 3 or Gate 2 versus Gate 1?) IRR 1: %Comparison 2: (Gate 1 versus Gate 2 or Gate 2 versus Gate 3 or Gate 3 versus Gate 1?) IRR 2: Using an internal rate of return…
help please answer in text form with proper workings and explanation for each and every part and steps with concept and introduction no AI no copy paste remember answer must be in proper format with all working
For the project with cash flow given below find the most sensitive factor among annual benefit, annual cost and salvage value if the changes by ±20%. Initial investment Annual revenue Annual Cost Salvage Value MARR Life in years Project Rs.2,00,000 Rs.1,00,000 Rs. 40,000 Rs. 50,000 10% 5
A sportswear factory has two alternative machines for producing jerseys. Costs are shown below. Minimum acceptable rate of return is 8%.What is the annual cost for machine Y?