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

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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…
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5
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Can some one please help me to answer each question correctly? please and thank you.
(2) If the initial investment on the equipment is 25000 and it will have a salvage value of 5000 at the end of 5 years. It will save 8000 per year for the study period. Is it worthwhile to install the equipment? Justify it by using Future Worth (FW) formulation when MARR is 20%