what is the rate of return for each alternative and for the incremental difference? if the MARR is 10%, which alternative should be selected? Alternatives A and B require investments of $10,310 and $13,400, respectively. Their respective net annual cash inflows are $3,300 and $4,000. What is the rate of return for each alternative and for the

what is the rate of return for each alternative and for the incremental difference? if the MARR is 10%, which alternative should be selected? Alternatives A and B require investments of $10,310 and $13,400, respectively. Their respective net annual cash inflows are $3,300 and $4,000. What is the rate of return for each alternative and for the

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

!
Two alternative investments are being considered. Design A has an initial cost of $3 million and annual cost of 135,000 dollars per year. Design B has an initial cost of $3.7 million and annual cost of 70,000 dollars per year. What is the rate of return of design B as compared to design A? Hint it is between 5% and 10%. MY Answer is 9.29 % is it correct?
If that 30% return on investment (ROI) occurs over a decade, r = .55 and n = 10, so the annualized rate of return is 0.0653 0.02658 0.0554 0.0201
Nowadays it is very important to reduce one's carbon "footprint" (how much carbon we produce in our daily lifestyles). Minimizing the use of fossil fuels and instead resorting to renewable sources of energy (e.g., solar energy) are vital to a "sustainable" lifestyle and a lower carbon footprint. Let's consider solar panels that prewarm the water fed to a conventional home water heater. The solar panels have an installed cost of $2,500, and they reduce the homeowner's energy bill by $426 per year. The residual value of the solar panels is $550 at the end of their 9-year life. What is the annual IRR of this investment? Use the trial-and-error method starting with an initial guess of 13%. (a) The annual IRR of this investment is 10.72%. (Round to two decimal places.) (b) If the homeowner's MARR is 10%, is the investment economical? O A. No B. Yes
Compare three alternatives on the basis of their capitalized costs at i=9.00% per year and select the best alternative. (Include a minus sign if necessary.) The capitalized cost of alternative E is $ ox, alternative F is $1375347.55, and alternative G is $ The best alternative is
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
MARR is 10% per year. Compare the two plans using the Capitalized Cost Method. The first plan calls for an initial investment of $500,000, with expenses of $20,000 per year for the first 20 years and $30,000 per year thereafter. It also requires an expenditure of $200,000 20 years after the initial investment, and this will repeat every 20 years thereafter. The second plan has an initial investment of $700,000 followed by a single (one time) investment of $300,000 30 years later. It will incur annual expenses of $10,000 forever. Based on the Capitalized Cost measure.Which plan would you recommend?
The ROR analysis evaluates the increments between two alternatives in pairwise comparisons. Select one: O a. True Ob. False
Beaver, a city in the United States, is attempting to attract a professional soccer team. Beaver is planning to build a new stadium that will cost $240 million. The annual upkeep is expected to amount to $830,000. The turf will have to be replaced every 9 years at a cost of $860,000. Painting every 8 years will cost $88,000. If the city expects to maintain the facility indefinitely, what is the estimated capitalized cost at i = 9% per year? The estimated capitalized cost is $
!
Waller County is planning to construct a Dam some tens of miles away from the Hempstead Recreation center to facilitate fishing in the El Manny River Basin and Power Generation. The first cost for the Dam will amount to $6,500,000. Annual maintenance and repairs will amount to $24,000 for the first four years, to $28,000 for each year in the next eight years, and to $32,000 per year for the next four years. At the end of the 16th year, $25,000 is estimated to be deposited into Waller county account as tax credits earned for its environmental compliance in the construction and operation of the Dam. In addition a major overhaul costing $650,000 will be required at the end of the seventh year. Use an interest rate of 10% and : a) Determine the engineering economy symbols and their value for each option. b) Construct the cash flow diagram c) Calculate the Capital Recovery for the project
Beaver, a city in the United States, is attempting to attract a professional soccer team. Beaver is planning to build a new stadium that will cost $380 million. The annual upkeep is expected to amount to $730,000. The turf will have to be replaced every 10 years at a cost of $820,000. Painting every 9 years will cost $76,000. If the city expects to maintain the facility indefinitely, what is the estimated capitalized cost at i= 10% per year? The estimated capitalized cost is $