Two mutually exclusive alternatives are being considered for company's use. One of these alternatives must be selected. The firm's MARR is 20% per year. The estimated cash flows for each alternative are as follows: Altemative 1 Alternative 2 Capital investment Annual expenses Useful life(years) Market value(at end of useful life) $20,000 5,500 $38.000 4,000 5 $1.000 10 $4,200 Which equipment alternative should be selected using NPW-C with a study period of 10 years? Assume the study period is shortened to five years. Which alternative would you recommend using NPW-C?

Two mutually exclusive alternatives are being considered for company's use. One of these alternatives must be selected. The firm's MARR is 20% per year. The estimated cash flows for each alternative are as follows: Altemative 1 Alternative 2 Capital investment Annual expenses Useful life(years) Market value(at end of useful life) $20,000 5,500 $38.000 4,000 5 $1.000 10 $4,200 Which equipment alternative should be selected using NPW-C with a study period of 10 years? Assume the study period is shortened to five years. Which alternative would you recommend using NPW-C?

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

Required information The tabulation of the incremental cash flows between alternatives A and B is shown. Alternative A has a 3-year life and alternative B a 6-year life. Year Incremental Cash Flows (BA), $ -22,500 5,000 5,000 11,000 5,000 5,000 5,000 NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. 0123456 If neither alternative has a salvage value, what is the first cost of alternative A? The first cost of alternative A is $-
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
Question 2 Full explain this question and text typing work only do not ignore this line
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?
Compare three mutually exclusive alternatives on the basis of their capitalized costs at i =10% per year. Alternative |First cost, $ AOC, $/year Salvage value, $| Life, years B2 300,000 |-10,000 |70,000 A1 -50,000 C3 |-30,000 5,000 2 900,000| 3,000 |200,000
Given the data for three different alternatives in the table below, determine the best alternative using the incremental rate of return (∆RoR) analysis. MARR =9%. A B C First cost $15,000 $25,000 $20,000 O &M Cost/ year 1,600 400 900 Benefit/year 8,000 13,000 9,000 Salvage value 3,000 6,000 4,600 Life in years 4 4 4 The better alternative between the second increment (B – C) is:. Group of answer choices Alt. B Alt. C Alt. B or Alt. C Alt. A
please answer all with complete solution and draw the cash flow diagram,,, do not use excel please. thank you....
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?