Two investment projects are being evaluated based on their payback periods. The first alternative requires an initial inves of $760,000, has gross revenues of $118,000, annual O&M costs of $23,000 and a service life of 20 years. What is the project's discounted payback period if the MARR is 8% per year? OA. 8.3 years OB. 13.3 years O C. 16.7 years O D. 9.4 years If the second alternative has a payback period of 8 years, which alternative should be preferred based on the payback per OA. The first alternative B. The second alternative

Two investment projects are being evaluated based on their payback periods. The first alternative requires an initial inves of $760,000, has gross revenues of $118,000, annual O&M costs of $23,000 and a service life of 20 years. What is the project's discounted payback period if the MARR is 8% per year? OA. 8.3 years OB. 13.3 years O C. 16.7 years O D. 9.4 years If the second alternative has a payback period of 8 years, which alternative should be preferred based on the payback per OA. The first alternative B. The second alternative

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

!
DRAW CASH FLOW DIAGRAM Calculate the capitalized cost of a project that has an initial cost of P8,000,000 and an additional cost of P250,000 at the end of every 8 years. The annual operating costs will be P150,000 at the end of every year for the first 5 years and P200,000 thereafter. In addition there is expected to be recurring major rework cost of P500,000 every 13 years. Assume i=12%
The estimated negative cash flows for three design alternatives are shown below. The MARR is 10% per year and the study period is four years. Which alternative is best based on the IRR method? Doing nothing is not an option. Capital investment Annual expenses OA. Alternative B OB. Alternative C OC. Alternative A EOY 0 1-4 A $85,700 8,500 Alternative B $64,500 Which alternative would you choose as a base one? Choose the correct answer below. 15,150 C $71,900 12,450
Can you compute the PW of alternative A, the AW of alternative B, the FW of Alternative C, and the PW of alternative D? Also for a MARR of 12%, rank the MEAs from most profitable to least profitable. HINT: You will need to perform additional calculations before answering this question.
Find the conventional payback period for the following project: First Cost $10,000 $500 in Year 1, increasing by $200/year $3,000/year $4,000 Maintenance Income Salvage Useful Life 10 years MARR 10%
Consider the cashflow (n = 10 years, MARR = e = 14%) Cash Flow A Investment Revenues P 180,000 P 350,000 per year a. Calculate the annual worth (AW) of the project Expenses P 400,000 per year for the first 3 years, decreasing by P 50,000 per year thereafter Salvage Value P 40,000
I need solve this question in Engineering economics
Compare the alternatives below on the basis of their capitalized costs. Assume the MARR is 10% per year, compounded annually Project A Project B Project C First cost ($200,000) ($275,000) ($800,000) Annual income $60,000 $70,000 $80,000 Salvage value $40,000 $60,000 $500,000 Life, years 4 7 infinity
The Philippine Institute of Industrial Engineers (PIIE) is planning to put up its own building. Two proposals being considered are: A: The construction of the building now to cost Php 400,000 B: The construction of a smaller building now to cost Php 300,000 and at the end of 5 years to be added to cost Php 120,000 By how much is proposal A more economical than proposalB if interest is to be neglected? Answer is Php Blank 1
We have the following K-T conditions: 1-10z + 3 – 6A 0 & x(10z+ 3 – 6) = 0 2-10x +1 – 31 0 & z(10x +1– 3) = 0 3-3 – 6x – 3z >0 & \>0 & \(3– 6x %D Which of the following best represents the problem associated with those K-T conditions? min(2.2) 10xz + 3x + z such that 3 6x + 3z Omin(r,2) 10æz + 3x + z such that 3 > 6x + 3z
The product development group of a high-tech electronics company developed five proposals for new products. The company wants to expand its product offerings, so it will undertake all projects that are economically attractive at the company’s MARR of 20% per year. The cash flows (in $1000 units) associated with each project are estimated. Which projects, if any, should the company accept on the basis of a present worth analysis? Project A B C D E Initial investment, $ −400 −510 −660 −820 −900 Operating cost, $/year −100 −140 −280 −315 −450 Revenue, $/year 360 235 400 605 790 Salvage value, $ — 22 — 80 95 Life, years 3 10 5 8 4
The MARR is 15%. Three alternatives are available and the associated cash flow is as follow: Year First Cost A B C $1,700 $2,100 $3,750 Annual Benefit Useful Life 2 $1,000 $1,000 $1,000 3 6 Answer the following in this format: 1.23 1. The payback period for Alternative A is 2. The payback period for Alternative B is 3. The payback period for Alternative C is Based on Payback period analysis, Alternative should be selected. (Enter only the letter)