You have been asked to perform an economic evaluation of two projects and recommend one ofthem for implementation. The project parameters are as follows:Project AProject BDiscountRate4.0%4.0%Your analysis concludes that:Project Cost$1,000,000$750,000Project Life(yrs)1015Elec. Savings Elec. Cost(kWh/yr)($/kWh)800,000600,000O Project A is preferable, but Project B also has attractive performance.O Project B is preferable, but Project A also has attractive performance.O Project B is preferable and Project A results in a net loss.O Project A is preferable and Project B results in a net loss.$0.12$0.12Annual CostEscalation Rate1.5%1.5%

An economic evaluation of the two projects A and B can be done by comparing their Net Present Value…

You have been asked to perform an economic evaluation of two projects and recommend one of them for implementation. The project parameters are as follows: Project A Project B Discount Rate 4.0% 4.0% Your analysis concludes that: Project Cost $1,000,000 $750,000 Project Life Elec. Savings Elec. Cost (yrs) (kWh/yr) ($/kWh) 10 15 800,000 600,000 O Project A is preferable, but Project B also has attractive performance. O Project B is preferable, but Project A also has attractive performance. O Project B is preferable and Project A results in a net loss. O Project A is preferable and Project B results in a net loss. $0.12 $0.12 Annual Cost Escalation Rate 1.5% 1.5%

You have been asked to perform an economic evaluation of two projects and recommend one of them for implementation. The project parameters are as follows: Project A Project B Discount Rate 4.0% 4.0% Your analysis concludes that: Project Cost $1,000,000 $750,000 Project Life Elec. Savings Elec. Cost (yrs) (kWh/yr) ($/kWh) 10 15 800,000 600,000 O Project A is preferable, but Project B also has attractive performance. O Project B is preferable, but Project A also has attractive performance. O Project B is preferable and Project A results in a net loss. O Project A is preferable and Project B results in a net loss. $0.12 $0.12 Annual Cost Escalation Rate 1.5% 1.5%

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 10E

See similar textbooks

Similar questions

PLABOR МIC $7.00 -S $5.25 $4.50 MVP QLABOR 1000 1500
Lifewear, a manufacturer of women's sports clothes, is considering adding a line of skirts and jackets. The production would take place in a part of its factory that is currently not being used. The first output would be available in time for the 2021 fall season. The following information is available. Answer parts (a) through (d). New Product Line Information First cost in 2020 ($) 15,100,000 Planned output (units/year) 324,000 Observed, current dollar MARR before tax Study period Materials 0.25 6 years Year 2020 Prices ($/unit) Labour 12 8.25 35 Output a. What is the real internal rate of return? (This is most easily done with a spreadsheet.) The real internal rate of return is about percent. (Round to one decimal place as needed.) b. What inflation rate will make the real MARR equal to the real internal rate of return? The inflation rate would need to be about percent. (Round to two decimal places as needed.) c. Calculate the present worth of the project under three possible future…
PW values of a project were calculated for several values of (i). The results were plotted as shown in the figure. a. What are the values of ROR (i*) for this project? Put 100 integer number followed immediately by% 75 1- 50 25 2- 10 20 30 40 50 b. If this project is a public sector project (i.e. its ROR is low). What value should we choose as the ROR for the 50 project? Put integer number followed immediately 75 by% 100 (O00TS x) Md
Required information Akash Uni-Safe in Chennai, India, makes Terminator fire extinguishers. The company needs replacement equipment to form the neck at the top of each extinguisher during production. Machine First cost, $ AOC, $ per year Salvage value, $ Life, years D E -70,000 -15,000 10,000 6 NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. -60,000 -12,000 8,000 Select between two metal-constricting machines. Use the corporate MARR of 15% per year with future worth analysis using tabulated factors. The future worth of machine D is $- 8008 and the future worth of machine E is $- 20280 The machine selected based on the future worth analysis is
PW values of a project were calculated for several values of (i). The results were plotted as shown in the figure. What are the values of ROR (i*) for this project? Put only integer numbers followed immediately by "%" sign 200.000 150,000 100,000 50,000 1- -50,000 -100,000 -150,000 2- -30% -20% -10% 0% 10% 20% 30% Interest rate i, % PW value. $
7 You received a memo that you are appointed as the team leader for a new commercial building project. Based on the estimation, if your team will be using a steel, it will cost 80,000 per month and 145000 cost if glass For the plan A, it has an annualmaintenance cost is 25000, 1000 repair cost every 2 years and a salvage value of 3000 after 15 years For the plan B, the repair cost is 3500 every 3 years, annual maintenance cost of 30000 and a salvage value of 1000 after 20 years. Compute for the capitalized cost if the money is worth 8% compounded annually and choose the best material for the project.CC PlanA = (2 decimal placesCC Plan B = (2 decimal places)
The ore of a gold mine in the province contains, on average, 0.5 ounce of gold per ton. Method A ofprocessing costs 150Php/ton and recovers 93% of the gold, while Method B costs only 120Php/tonand recovers 81% of the gold. If gold can be sold at 1,200/ounce, which method is better and by howmuch?a. Method A, by 43Phpb. Method A, by 42Phpc. Method B, by 42Phpd. Method B, by 43Php
The Pear company produces and sells pPhones. Their production costs are $290000 plus $180 for each pPhone they produce, but they can sell the pPhones for $250 each. How many pPhones should the Pear company produce and sell in order to break even? The break-even number of pPhones is Preview
A certain masonry dam requires 200,000 m³ of gravel for its construction. The contractor found two possible sources for the gravel with the following data: Source A Source B Average distance, gravel pit to dam site 3 km 1.2 km Gravel cost/m³ at pit ➖➖➖➖➖ P10 Purchase price of pit P800,000 Road construction necessary P450,000 Overburden to be removed at P4.20/m³ 90,000m³ ➖➖➖➖➖➖ Hauling cost/m³/km P4 P4 What is the Total Cost of Source A
The data provided by a company for the year 2021 - 2022 to carry out Break Even Analysis. Provide the results, complete analysis and suggestions. The data is as follows: The fixed cost of the year is 80000.0 R.O The estimated sales are 400000.0 R.O Material Cost / unit 10.0 R.O Production cost / unit 1S 20.0 R.O Transportation & other Misc Cost / unit (Approx) 5.00 R.O Marketing and advertisement cost / unit 3 R.O Each unit is sold at price 50.0 R.O 1. Construct the B.E.P chart on a graph sheet and indicate, B.B.P, M.o.s. 2. Indicate B.E.P & M.o.S after the improvement measures has been taken (With different colours). 3. Determine the profit before and after the measures taken.
Solve (d) and (e) please.
Graph on right, shows AW of costs versus number of service years of project X. Based on the graph, economic service life of the project is Larger costs Total AW of costs AW of AOC Capital recovery 3.5 10 Years О 3.5 years O 10 years O 1 year О З уears AW of costs, S/year