Use the data table and the spiderplot below to answer the questions.ItemInitial investment, $Annual revenue, $Annual expense, $Market value, $Project life, yearsPW, in-20%-15%-10%PW v.% Change in Parmeter$15,000.00$10,000.00$5,000.00ههای-5%($5,000.00)($10,000,00)($15,000.00)($20,000.00)($25,000.00)Estimated Cash Flows55,00070004500180080%5%10%Change in Parameter, in %15%20%25%30% a. (Y/N) Is this project economically justified, EJ?O YesNOb. Why or Why Not? Economically Justified, EJO UnkownO EJ because PW < 0Not EJ because likely AW<0O EJ because AW > 0c. The parameter most sensitive to breakeven is?MV(8)AEOARO FCd. The parameter that management should be least worried about is?O FCO ARO AEOMV(8)e, (T/F) If the initial investment cost is reduced by $5,000, the project will be economically justified.

This question involves the analysis of a project using cash flow data and a spider plot. The…

Use the data table and the spiderplot below to answer the questions. Item 02$% -20% PW, in S Initial investment, $ Annual revenue, $ Annual expense, $ Market value, $ Project life, years -10% PW v.% Change in Parmeter $15,000.00 $10,000.00 $5,000.00 + $0.00 -5% ($5,000.00) ($10,000.00) ($15,000.00) ($20,000.00) ($25,000.00) Estimated Cash Flows 55,000 7000 4500 1800 8 0% 5% 10% Change in Parameter, in % 15% 20% 25% 30%

Use the data table and the spiderplot below to answer the questions. Item 02$% -20% PW, in S Initial investment, $ Annual revenue, $ Annual expense, $ Market value, $ Project life, years -10% PW v.% Change in Parmeter $15,000.00 $10,000.00 $5,000.00 + $0.00 -5% ($5,000.00) ($10,000.00) ($15,000.00) ($20,000.00) ($25,000.00) Estimated Cash Flows 55,000 7000 4500 1800 8 0% 5% 10% Change in Parameter, in % 15% 20% 25% 30%

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: Given: Cash flows for an investment. Year 1 2 3 Cash flow $400 500 600 700 Required: EUAC at 5% per…

A: Cash flow:The sum of the total money is represented in the diagram. It represents the magnitude and…

Q: A manufacturing firm currently has annual fixed costs of $2.2M and variable costs of $7/unit. An…

A: Annual fixed costs (FC) = $2.2M Variable costs (VC) = $7/unit Fixed costs Increases = $180,000 New…

Q: In order to improve evacuation routes out of New Orleans in the event of another major disaster such…

A: Present value is the current value of future cash flows or payments. It is the discounted value of…

Q: Which projects are worth funding if the market interest rate is 8%? Project |Cash Cash inflows…

A: Here, four projects for investment is given with their inflow and outflow of cash and their…

Q: A project has an initial cost of $10000.00 and provides for savings starting at $5000.00 at the end…

A: In economics, present value refers to the current value of a future stream of cash flows. Future…

Q: The following table shows the past profits of Company X that has just come for sale to the public…

A: Perpetuity: It refers to the cash payment that will occur on the forever basis. The cash flows…

Q: Required Information The Bureau of Indian Affairs provides various services to American Indians and…

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

Q: Ruth intends to buy a car worth R360 000 to use it as Uber and sell it in 10 years. The car is…

A: Part 2(a): Cash-Flow DiagramInitial Investment: R360,000 (outflow at time 0)Monthly Profit: R40,000…

Q: $10K b 1 2 $900 $1,000 3 $800 4 $700 $600 X O X= {10,000 - 1,000(P/A, 4%, 6) +100(P/G, 4%, 6)} (F/P,…

A: In a cash flow series the arithmetic gradient rises or falls by a constant amount. The cash flow…

Q: Some mill investment project ,construction period of 2 years, 18- year production, infrastructure…

A: Given: Let the expected annual profit be x. The values will be seen as: End of the year from 0 to 1…

Q: 201 11. Determine the IRR for an equipment that costs $250,000 and would provide positive cash of…

A: Since on the top you mentioned 11, I'm solving the 11th question only. Note:- i'm using the trial…

Q: 14. R TOPIC: ENGINEERING ECONOMICS PLEASE ANSWER IN 4 DECIMAL POINTS

A: The total annual cost of machine A is equal to the sum of capital recovery cost and annual operating…

Q: Some particulars for a project are as follows. Initial Capital Cost in year 0 ($Mn) Follow-up…

A: The initial cost of the project is $1000, and the annual cost will be 10% of the initial cost.…

Q: a project’s initial cost of $220,000 is borrowed from a bank. The following net cashflow is expected…

A: Present worth, also known as present discounted value (PDV), is a concept in finance that refers to…

Q: If a city's current population is 65.000 and compounding at the rate of 5 percent per year, (a) what…

A: Here we calculate the following terms by using the given information and conclude the solution , so…

Q: 4. Consider four mutually exclusive alternatives: Initial Cost, $ A $770.00 Uniform annual benefit,…

A: The choice between various available alternatives is known as decision making and in economics, the…

Q: 3 If a project schedule is accelerated, it is possible to complete the project in B-months rather…

A: Present worth, also known as present value, refers to the current value of a future stream of cash…

Q: Contributions of $800 at the beginning of every three months resulted in an RRSP worth $85.000 after…

A: Step 1:Given that : Quarterly deposit amount (P) = $800Accumulated amount (FV) = $85,000Time (t)=10…

Q: 11- A project requires an initial cost of $15432.00. It results in savings that start at $2000.00 at…

A: Over a given period, an investment's return on investment (RoR) is calculated as a percentage of the…

Q: 4. Graphitia Design Company considers purchasing a computer system. The initial capital cost of the…

A: Net present value = Present value of benefits - Present value of costs

Q: 2. You are presented with three investment possibilities; however, you only have enough money to…

A: Given Minimum Acceptable Rate of return = 5 % As the projects are mutually exclusive, we will…

Q: Consider the following. (Use the FHA Maximum Loan Values by State table.) Sale Price State…

A: The stipulated minimal sum of money needed to purchase or invest in a security, asset, or…

Question

a. (Y/N) Is this project economically justified, EJ?
O Yes
NO
b. Why or Why Not? Economically Justified, EJ
O Unkown
O EJ because PW < 0
Not EJ because likely AW<0
O EJ because AW > 0
c. The parameter most sensitive to breakeven is?
MV(8)
AE
OAR
O FC
d. The parameter that management should be least worried about is?
O FC
O AR
O AE
OMV(8)
e, (T/F) If the initial investment cost is reduced by $5,000, the project will be economically justified.

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: introduction

VIEW

Step 2: project economically justified

VIEW

Step 3: why or why not economically justified

VIEW

Step 4: parameter to most sensitive breakeven

VIEW

Step 5: parameter that should be at least worried about

VIEW

Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 6 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

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

Answer question 9.69 using excel and show steps clearly please
2- Calculate the internal rate of return for the following investments: Initial Cost Annual Benefit Answer: 13.30% Operations and Maintenance Overhaul at year 3 Salvage Value Useful Life $-30,000 $10,000 $2,000 $8,000 $8,000 6 5 years
N3
14. The time line represents which investment scenario? Today 12 18 24 months months months months months months 30 36 on $2500 $2500 $2500 $2500 $2500 $2500 $2500 $2500 $2500 $2500 $2500 $2500 d or cre $2500.00 follow he qu $2500(1.029) = $2572.50 k as done $2500(1.029)? = $2647.10 $2500(1.029) = $2723.87 $2500(1.029) = $2802.86 $2500(1.029)5 = $2884.14 $2500(1.029) = $2967.78 $2500(1.029) = $3053.85 $2500(1.029)8 = $3142.41 $2500(1.029)° = $3233.54 $2500(1.029)10 = $3327.31 $2500(1.029)11 = $3423.81 answ ge on %3D %3D ou've be abl aments %3D %3D our rou o Renee Sau %3D your ha %! Total = $35 279.17 a. Future Value of $2500 invested monthly for 3 years in a fund that pays 2.9% per year, compounded monthly b. Future Value of $2500 invested monthly for 3 years in a fund that pays 34.3% per year, compounded monthly c. Future Value of $2500 invested quarterly for 3 years in a fund that pays 11.6% per year, compounded quarterly d. Present Value of $2500 invested monthly for 3 years in a…
Correct answer is D . I neees steps how to get that an
9-83 Assume a cost improvement project has only a first cost of $100,000 and a monthly net savings, M. There is no salvage value. Graph the project's IRR for payback periods from 6 months to the project's life of N years. The firm accepts projects with a 2- year payback period or a 20% IRR. When are these standards consistent and when are they not? (a) Assume that N = 3 years. (b) Assume that N = 5 years. (c) Assume that N = 10 10 years. (d) What recommendation do you have for the firm about its project acceptance criteria?
It’s time to get a new laptop that is $2500. If you finance it, you will be charged 8% annual interest and it will take you two years to pay it off, paying each month. (A)How much will you pay each month for this laptop? (B)What are your total acquisition costs of financing the laptop?
1. The maintenance cost for a certain machine is $1,000 per year for the first 5 years and $2,000 per year for the next 5 years. At an interest rate (compounded) of 10% per year, the present worth of the maintenance is closest to: A. Less than $7,000 B. $7,450 C. $8,500 D. More than $9,000
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Problem 2 Consider the following sets of investment projects n(years) A($) B($) C($) D($) 0 -3,500 -5,800 -5,200 -40,000 1 600 3,000 2,000 12,000 2 600 2,000 4,000 14,000 3 1,000 1,000 2,000 18,000 4 1,000 500 4,000 18,000 5 1,000 500 2,000 14,000 Compute the equivalent annual worth of each project at i-10% and determine the acceptability of each project.
1.) What are the 3 assumptions that must be considered when using the LCM approach in comparing PW of differentlife alternatives? Question 2 in image, thank you.
2 - Calculate the internal rate of return for the following investments: Initial Cost Annual Benefit Answer: 13.30% Operations and Maintenance Overhaul at year 3 Salvage Value Useful Life $-30,000 $10,000 $2,000 $8,000 $8,000 6 years