YOLO Construction Co. is planning to purchase a new truck. Company uses MARR as 10%per year. Evaluate the following two alternatives by Present Worth Analysis using LeastCommon Multiple (LCM) technique. Select the PW value of Alternative A.АBFirst Cost, SAnnual Income, S/year-170000-13000022000 and increasing29000starting from year 1 by $500each year-7000Annual Cost, $/yearMajor Maintenance Cost,every 3 years, SSalvage Value, $Life, years-11000-1000017000100004Select one:O a. -195520.8O b. -142110O C. -116200O d. -146445.8O e. -191185

PW is the present value of cash flows that are expected to occur in the future.

YOLO Construction Co. is planning to purchase a new truck. Company uses MARR as 10% per year. Evaluate the following two alternatives by Present Worth Analysis using Least Common Multiple (LCM) technique. Select the PW value of Alternative A. A -170000 B -130000 А First Cost, S Annual Income, S/year 22000 and increasing 29000 starting from year 1 by $500 each year Annual Cost, $/year Major Maintenance Cost, every 3 years, S Salvage Value, S Life, years -7000 -11000 -10000 17000 10000 4 8 Select one: O a. -195520.8 O b. -142110 O C. -116200 O d. -146445.8 O e. -191185

YOLO Construction Co. is planning to purchase a new truck. Company uses MARR as 10% per year. Evaluate the following two alternatives by Present Worth Analysis using Least Common Multiple (LCM) technique. Select the PW value of Alternative A. A -170000 B -130000 А First Cost, S Annual Income, S/year 22000 and increasing 29000 starting from year 1 by $500 each year Annual Cost, $/year Major Maintenance Cost, every 3 years, S Salvage Value, S Life, years -7000 -11000 -10000 17000 10000 4 8 Select one: O a. -195520.8 O b. -142110 O C. -116200 O d. -146445.8 O e. -191185

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The Larkspur Furniture Company needs a new grinder. Compute the present worth for these mutually exclusive alternatives and identify which you would recommend given i-10% per year. Larkspur uses a 10-year planning horizon. Alternati ve A B Initial Cost $4500 $5500 Annual Costs $300 $400 $0 5 years 10 years Salvage Value $500 Life a) PW costs of alternative A b) PW costs of alternative B c) Which one do you recommend? Explain why.
Consider the following 2 alternatives. Alternative A Initial cost: $10,000 Mainteinance anual $6000 Useful life 2 years Residual Value $1000 Alternative B Initial cost $ 12,000 Maintenance annual $ 5000 Useful life 4 years Residual value $ 3000 MARR for both is 8% a) The equivalent Uniform Annual Value for alternative A is $ and the equivalent Uniform Annual Value for alternative B is $
Evaluate a combined cycle power plant on the basis of the PW method when the MARR is 12% per year. Pertinent cost data are as follows (given):
Alternative X has a first cost of $30,000, an operating cost of $9,000 per year, and a $5,000 salvage value after 5 years. Alternative Y will cost $45,000 at nO with an operating cost of $4,000 per year after that and a salvage value of $7,000 after 5 years. At an MARR of 12% per year, what is the present worth far alternative X2 $49,606 $58,777 $59,606 -$32,443
Compare the alternatives C and D on the basis of a present worth analysis using an interest rate of 10% per year and a study period of 10 years. Alternative C First Cost $-40,000 $-11,000 $-24,000 AOC, per Year Annual Increase in Operating Cost, per Year Salvage Value Life, Years $-2,000 $-200 $-500 $6,000 $200 10 The present worth of alternative C is $ and that of alternative D is $ (Click to select) voffers the lower present worth.
Net Present Value Method for a Service Company AM Express Inc. is considering the purchase of an additional delivery vehicle for $50,000 on January 1, 20Y1. The truck is expected to have a 5-year life with an expected residual value of $7,000 at the end of 5 years. The expected additional revenues from the added delivery capacity are anticipated to be $57,000 per year for each of the next 5 years. A driver will cost $39,000 in 20Y1, with an expected annual salary increase of $3,000 for each year thereafter. The annual operating costs for the truck are estimated to be $2,000 per year. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247…
A construction company is evaluating two similar pieces of equipment for their gravel pit operation. If the company policy is to use a MARR = 12%, determine which alternative is economically the better option. Use the EAC method: Option B $75,000 Item Option A $40,000 Initial Purchase Cost Operating Cost (1st year) $25,000 $15,000 Annual increase in Operating Cost No increase 2%/yr Lifespan Salvage Value @ end-of-life 4 years 6 years $10,000 $7,000 Do this question by hand.
Net Present Value Method for a Service Company Coast-to-Coast Inc. is considering the purchase of an additional delivery vehicle for $46,000 on January 1, 20Y1. The truck is expected to have a five-year life with an expected residual value of $7,000 at the end of five years. The expected additional revenues from the added delivery capacity are anticipated to be $61,000 per year for each of the next five years. A driver will cost $41,000 in 20Y1, with an expected annual salary increase of $3,000 for each year thereafter. The annual operating costs for the truck are estimated to be $2,000 per year. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 a. Determine the…
expense of $500. Consider a yearly Two machines are evaluated for a new project, consider a yearly interest rate of 6% and the information described in the following table. Determine EUAC for both alternatives and determine the best option. Purchase cost Salvage value Duration Machine A Machine B $10,000 $15,000 $1,250 $1,950 5 years 10 years 11 13 L
Compare the Annual Worth of the two systems and identify the better option at MARR = 10% per year: Solar: First cost $1,500,000; AOC $-700,000; Salvage value $100,000; Life of 8 years Geothermal: First cost $2,250,000; AOC $-600,000; Salvage value $50,000; Life of 8 years Select the Geothermal System with a calculated AW of $-1,017,368 Select the Geothermal System with a calculated AW of $-727,591 Select the Solar System with a calculated AW of $-1,238, Select the Solar System with a calculated AW of $-972,416
The following three alternatives have been developed and costed to improve the efficiency of aircraft engines. Compare the alternatives using capitalized cost and a MARR of 10% per year compounded annually. Alternative Alternative Alternative G First Cost, $ -1,000,000 -3,000,000 -5,000,000 Net income $ per year 325 000 400,000 600,000 Salvage value, S 50,000 70,000 Life, years 4 8.
In the choice of mechanical equipment you are required to submit your recommendation as to which of the two steam shovels for earth excavation is better to buy. The basis is 20 year service & interest at 7%. Taxes & insurance are the same in each case: 5% & 1% respectively. Use Annual Cost & CC. 50-ton shovel 70 ton shovel First Cost P30k P38k 20 years 20 years P2k Life Salvage value Annual Operation Annual Upkeep Annual Output P3k P15k P17k P1.5k P2k 150k yards 200k yards

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