Question 23Walt Wallace Construction Enterprises may buy a new dump truck with a 10-yearlife. Interest rate is 6%. The cash flow for both models to choose from is below:First costModel A$65,000$8,000$10,000$25,000Annual operating costAnnual incomeSalvage valueWhat is the NPW of Model A?4Model B$59,000$10,000$17,500$19,000

Net Present Worth (NPW), also known as Net Present Value (NPV), is a financial metric used in…

Answered: Walt Wallace Construction Enterprises…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Annual thermal loss through the pipe lines of a factory is estimated to be $412 in terms of wasted energy. A new anti-heating technology can reduce the energy loss by 93% and costs for $1232. Although this new technology has no salvage value but it helps the factory to save much energy for upcoming 8 Years. Identify the present worth of the entire investment if the market rate is 10%.
8- The life of a project is 10 years. An equipment is needed for this project. Two alternatives are available. Equipment A has an initial cost of $5000.00, an annual maintenance cost of $300.00, and a salvage value of $800.00 after 5 years. Equipment B has an initial cost of $7000.00, an annual maintenance cost of $400.00, lasts for 10 years and has no salvage value. If the interest rate is 6%: a) Equipment A should be purchased. b) Equipment B should be purchased. c) No equipment should be purchased. d) There is no difference in choosing between A or B.
Economics Two alternative water purification systems are considered to meet the drinking water needs in Canada. The data of the two alternatives are given in the table below. If the interest is 12% compound, which alternative would be appropriate using the annual equivalent (AE) method? System 1 System 2 System 3 initial investment cost -100 -60 -1000 monthly cost -10 -12 -8 maintenance costs -50 Once in two years -30 once in a year No scrap value economic life (years) 10 8 no 4 3 infinity
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A $2500 computer system can be leased for $79 per month for 3 years. After 3 years, it can be purchased for $750. This is also the salvage value if the system was purchased originally. What is the effective annual rate for leasing the computer? Ans. r = 1.75% and Effective Annual Annual Rate = 23.1% Please shows the formula used dont make a shortcut answer. Provide full detailed solution.
Littrell's Nursery needs a new irrigation system. System one will cost $145,000, have annual maintenance costs of $10,000, and need an overhaul at the end of year six costing $30,000. System two will have first year maintenance costs of $5,000 with increases of $500 each year thereafter. System two would not require an overhaul. Both systems will have no salvage value after 12 years. If Littrell's cost of capital is 4%, using annual worth analysis determine the maximum Littrell's should be willing to pay for system two.
6
PLEASE TAKE INTO ACCOUNT THAT "g" EQUALS 7 IN THIS PROBLEM AND PLEASE DRAW THE CASH FLOW DIAGRAM

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Walt Wallace Construction Enterprises may buy a new dump truck with a 10-year life. Interest rate is 6%. The cash flow for both models to choose from is below: Model B First cost Model A $65.000 $59.000