You have been asked to evaluate two alternatives, X and Y, that may increase plant capacity for manufacturing high-pressure hydraulichoses. The parameters associated with each alternative have been estimated. Which one should be selected on the basis of a presentworth comparison at an interest rate of 12% per year? Why is yours the correct choice?AlternativeFirst CostMaintenance cost, perYearY$-45,000$-80,000$-14000$-2000Salvage ValueLife$3,5005 years$9,0005 yearsThe present worth of alternative X is $and that of alternative Y is $Alternative ((Click to select) + is selected by the company.

Present worth The measure of money today that is identical in worth to an installment, or to a…

Answered: You have been asked to evaluate two…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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6
A consulting engineering firm is considering two models of SUVs for the company principals. A GM model will have a first cost of $36,000, an operating cost of $4000, and a salvage value of $15,000 after 3 years. A Ford model will have a first cost of $32,000, an operating cost of $3100, and also have a $15,000 resale value, but after 4 years. (a) At an interest rate of 15% per year, which model should the consulting firm buy? Conduct an annual worth analysis. (b) What are the PW values for each vehicle?
Compare the alternatives C and D on the basis of a present worth analysis using an interest rate of 15.00% per year and a study period of 10 years. (Include a minus sign if necessary.) Alternative First Cost AOC, per Year Annual Increase in Operating Cost, per Year Salvage Value Life, Years The present worth of alternative C is $ с $-50000 $-8000 $-1500 $14000 10 $-21000 $-9000 $-200 $1500 5 and that of alternative D is $
5
Mechanical engineer at Company B is considering five equivalent projects, some of which have different life expectations. Salvage value is nil for all alternatives. Assuming that the company’s MARR is 13% per year, determine which should be selected (a) if they are independent, and (b) if they are mutually (c) Explain why your selection in part (b) is correct. First Cost, $ Net Annual Income, $/Year Life, Years A -20,000 +5,500 4 B −10,000 +2,000 6 C −15,000 3,800 6 D −60,000 +11,000 12 E −80,000 +9,000 12
(2) If the initial investment on the equipment is 25000 and it will have a salvage value of 5000 at the end of 5 years. It will save 8000 per year for the study period. Is it worthwhile to install the equipment? Justify it by using Future Worth (FW) formulation when MARR is 20%
A consulting engineering firm is considering two models of SUVs for the company principals. A GM model will have a first cost of $36,000, an operating cost of $4000, and a salvage value of $15,000 after 3 years. A Ford model will have a first cost of $32,000, an operating cost of $3100, and also have a $15,000 resale value, but after 4 years. (a) At an interest rate of 15% per year, which model should the consulting firm buy? Conduct an annual worth analysis. (b) What are the PW values for each vehicle? 10 16 -22)
Dexcon Technologies, Inc., is evaluating two alternatives to produce its new plastic filament with tribological (i.e., low friction) properties for creating custom bearings for 3-D printers. The estimates associated with each alternative are shown below. Using a MARR of 8% per year, which alternative has the lower present worth?
Please help.
Calculate the annual worth of a machine that has an initial cost of $35,000, a life of 10 years, and an annual operating cost of $10,000 for the first 4 years, increasing by 1000 per year hereafter. Use an interest rate of 15% per year.
The local bank pays 4% interest on savings deposits. In a nearby town, the bank pays 1% per quarter. A man who has $3000 to deposit wonders whether the higher interest paid in the nearby town justifies driving there What sum of money now is equivalent to $8250 two years hence, if interest is 4% per 6-month period? The answer is closest to: Hint : 4% per 6 month means semi annual periods so the n does not equal 2 anymore ! $8,923 $7,052 $8,580 $9,651
Urgently need

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