ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, Problem 35P
(a)
To determine
To construct:A choice table for interest tables from 0% to 100%
(a)
Expert Solution
Answer to Problem 35P
From table below, from 0% to 6%, Plan B should be preferred. Between 7% to 12% Plan C should be preferred. Beyond that Plan A should be selected
Explanation of Solution
NPV of Plan B
NPV of Plan C
Choice table for interest from 0% to 100%
| Interest rate | (P/A,i,15) | (P/F,i,15) | Plan A | Plan B | Plan C |
| 0% | 15.00 | 1.00 | 314,500 | 401,250 | 353,000 |
| 1% | 13.87 | 0.86 | 277,491 | 349,203 | 310,657 |
| 2% | 12.85 | 0.74 | 244,656 | 302,909 | 273,048 |
| 3% | 11.94 | 0.64 | 215,448 | 261,626 | 239,557 |
| 4% | 11.12 | 0.56 | 189,400 | 224,719 | 209,657 |
| 5% | 10.38 | 0.48 | 166,112 | 191,642 | 182,896 |
| 6% | 9.71 | 0.42 | 145,238 | 161,925 | 158,885 |
| 7% | 9.11 | 0.36 | 126,482 | 135,162 | 137,289 |
| 8% | 8.56 | 0.32 | 109,588 | 111,001 | 117,818 |
| 9% | 8.06 | 0.27 | 94,335 | 89,139 | 100,220 |
| 10% | 7.61 | 0.24 | 80,531 | 69,311 | 84,279 |
| 11% | 7.19 | 0.21 | 68,008 | 51,287 | 69,805 |
| 12% | 6.81 | 0.18 | 56,623 | 34,867 | 56,634 |
| 13% | 6.46 | 0.16 | 46,248 | 19,874 | 44,621 |
| 14% | 6.14 | 0.14 | 36,772 | 6,156 | 33,640 |
| 15% | 5.85 | 0.12 | 28,100 | (6,422) | 23,583 |
| 16% | 5.58 | 0.11 | 20,146 | (17,979) | 14,351 |
| 17% | 5.32 | 0.09 | 12,835 | (28,619) | 5,859 |
| 18% | 5.09 | 0.08 | 6,103 | (38,434) | (1,967) |
| 19% | 4.88 | 0.07 | (110) | (47,505) | (9,194) |
| 20% | 4.68 | 0.06 | (5,855) | (55,905) | (15,880) |
| 21% | 4.49 | 0.06 | (11,176) | (63,697) | (22,078) |
| 22% | 4.32 | 0.05 | (16,114) | (70,938) | (27,833) |
| 23% | 4.15 | 0.04 | (20,705) | (77,678) | (33,186) |
| 24% | 4.00 | 0.04 | (24,981) | (83,964) | (38,175) |
| 25% | 3.86 | 0.04 | (28,970) | (89,835) | (42,832) |
| 26% | 3.73 | 0.03 | (32,698) | (95,328) | (47,185) |
| 27% | 3.60 | 0.03 | (36,187) | (100,474) | (51,262) |
| 28% | 3.48 | 0.02 | (39,458) | (105,303) | (55,086) |
| 29% | 3.37 | 0.02 | (42,528) | (109,841) | (58,677) |
| 30% | 3.27 | 0.02 | (45,416) | (114,112) | (62,055) |
| 31% | 3.17 | 0.02 | (48,134) | (118,137) | (65,237) |
| 32% | 3.08 | 0.02 | (50,697) | (121,934) | (68,238) |
| 33% | 2.99 | 0.01 | (53,117) | (125,523) | (71,073) |
| 34% | 2.90 | 0.01 | (55,405) | (128,918) | (73,753) |
| 35% | 2.83 | 0.01 | (57,571) | (132,134) | (76,291) |
| 36% | 2.75 | 0.01 | (59,623) | (135,183) | (78,697) |
| 37% | 2.68 | 0.01 | (61,571) | (138,078) | (80,981) |
| 38% | 2.61 | 0.01 | (63,421) | (140,830) | (83,151) |
| 39% | 2.55 | 0.01 | (65,180) | (143,449) | (85,215) |
| 40% | 2.48 | 0.01 | (66,854) | (145,942) | (87,180) |
| 41% | 2.42 | 0.01 | (68,450) | (148,320) | (89,053) |
| 42% | 2.37 | 0.01 | (69,973) | (150,589) | (90,840) |
| 43% | 2.31 | 0.00 | (71,426) | (152,757) | (92,547) |
| 44% | 2.26 | 0.00 | (72,816) | (154,829) | (94,179) |
| 45% | 2.21 | 0.00 | (74,145) | (156,812) | (95,740) |
| 46% | 2.17 | 0.00 | (75,417) | (158,712) | (97,235) |
| 47% | 2.12 | 0.00 | (76,637) | (160,532) | (98,668) |
| 48% | 2.08 | 0.00 | (77,806) | (162,279) | (100,042) |
| 49% | 2.04 | 0.00 | (78,929) | (163,956) | (101,361) |
| 50% | 2.00 | 0.00 | (80,007) | (165,567) | (102,628) |
| 51% | 1.96 | 0.00 | (81,043) | (167,117) | (103,847) |
| 52% | 1.92 | 0.00 | (82,040) | (168,607) | (105,019) |
| 53% | 1.88 | 0.00 | (83,000) | (170,042) | (106,147) |
| 54% | 1.85 | 0.00 | (83,925) | (171,425) | (107,234) |
| 55% | 1.82 | 0.00 | (84,816) | (172,758) | (108,282) |
| 56% | 1.78 | 0.00 | (85,675) | (174,044) | (109,293) |
| 57% | 1.75 | 0.00 | (86,505) | (175,286) | (110,269) |
| 58% | 1.72 | 0.00 | (87,306) | (176,485) | (111,211) |
| 59% | 1.69 | 0.00 | (88,080) | (177,644) | (112,121) |
| 60% | 1.67 | 0.00 | (88,828) | (178,764) | (113,002) |
| 61% | 1.64 | 0.00 | (89,552) | (179,848) | (113,853) |
| 62% | 1.61 | 0.00 | (90,253) | (180,897) | (114,678) |
| 63% | 1.59 | 0.00 | (90,931) | (181,913) | (115,476) |
| 64% | 1.56 | 0.00 | (91,589) | (182,898) | (116,249) |
| 65% | 1.54 | 0.00 | (92,226) | (183,852) | (116,999) |
| 66% | 1.51 | 0.00 | (92,844) | (184,778) | (117,726) |
| 67% | 1.49 | 0.00 | (93,443) | (185,676) | (118,431) |
| 68% | 1.47 | 0.00 | (94,025) | (186,548) | (119,116) |
| 69% | 1.45 | 0.00 | (94,590) | (187,394) | (119,781) |
| 70% | 1.43 | 0.00 | (95,139) | (188,217) | (120,427) |
| 71% | 1.41 | 0.00 | (95,672) | (189,016) | (121,054) |
| 72% | 1.39 | 0.00 | (96,191) | (189,793) | (121,665) |
| 73% | 1.37 | 0.00 | (96,695) | (190,549) | (122,258) |
| 74% | 1.35 | 0.00 | (97,186) | (191,285) | (122,836) |
| 75% | 1.33 | 0.00 | (97,663) | (192,001) | (123,398) |
| 76% | 1.32 | 0.00 | (98,128) | (192,698) | (123,946) |
| 77% | 1.30 | 0.00 | (98,581) | (193,377) | (124,479) |
| 78% | 1.28 | 0.00 | (99,023) | (194,039) | (124,998) |
| 79% | 1.27 | 0.00 | (99,453) | (194,684) | (125,505) |
| 80% | 1.25 | 0.00 | (99,872) | (195,312) | (125,998) |
| 81% | 1.23 | 0.00 | (100,282) | (195,926) | (126,480) |
| 82% | 1.22 | 0.00 | (100,681) | (196,524) | (126,950) |
| 83% | 1.20 | 0.00 | (101,070) | (197,108) | (127,408) |
| 84% | 1.19 | 0.00 | (101,450) | (197,678) | (127,856) |
| 85% | 1.18 | 0.00 | (101,822) | (198,235) | (128,293) |
| 86% | 1.16 | 0.00 | (102,184) | (198,779) | (128,720) |
| 87% | 1.15 | 0.00 | (102,539) | (199,310) | (129,137) |
| 88% | 1.14 | 0.00 | (102,885) | (199,829) | (129,544) |
| 89% | 1.12 | 0.00 | (103,223) | (200,337) | (129,943) |
| 90% | 1.11 | 0.00 | (103,554) | (200,833) | (130,332) |
| 91% | 1.10 | 0.00 | (103,878) | (201,318) | (130,713) |
| 92% | 1.09 | 0.00 | (104,194) | (201,793) | (131,086) |
| 93% | 1.08 | 0.00 | (104,504) | (202,258) | (131,451) |
| 94% | 1.06 | 0.00 | (104,807) | (202,712) | (131,808) |
| 95% | 1.05 | 0.00 | (105,104) | (203,158) | (132,157) |
| 96% | 1.04 | 0.00 | (105,395) | (203,593) | (132,499) |
| 97% | 1.03 | 0.00 | (105,680) | (204,020) | (132,834) |
| 98% | 1.02 | 0.00 | (105,958) | (204,438) | (133,163) |
| 99% | 1.01 | 0.00 | (106,232) | (204,848) | (133,484) |
| 100% | 1.00 | 0.00 | (106,499) | (205,250) | (133,799) |
(b)
To determine
To select:the best alternative at expected
(b)
Expert Solution
Answer to Problem 35P
Best alternative at expected rate of return of 10%isPlan A having highest NPV of $84,279.
Explanation of Solution
As per the choice table above, at expected rate of return of 10% Plan C has highest NPV of $84,279 as compared to other plans; hence Plan C should be preferred.
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
epidemology/economics
Don't use ai to answer I will report you answer
Which of the following is true about the concept of concentration?
Group of answer choices
The lower the degree of rivalry amongst the firms, the higher the concentration.
The lower the number of firms in a market, the lower the concentration.
All of the answers are correct.
The higher the degree of rivalry amongst the firms, the lower the concentration
Chapter 8 Solutions
ENGR.ECONOMIC ANALYSIS
Ch. 8 - Prob. 1QTCCh. 8 - Prob. 2QTCCh. 8 - Prob. 3QTCCh. 8 - Prob. 4QTCCh. 8 - Prob. 5QTCCh. 8 - Prob. 1PCh. 8 - Prob. 2PCh. 8 - Prob. 3PCh. 8 - Prob. 4PCh. 8 - Prob. 5P
Ch. 8 - Prob. 6PCh. 8 - Prob. 7PCh. 8 - Prob. 8PCh. 8 - Prob. 9PCh. 8 - Prob. 10PCh. 8 - Prob. 11PCh. 8 - Prob. 12PCh. 8 - Prob. 13PCh. 8 - Prob. 14PCh. 8 - Prob. 15PCh. 8 - Prob. 16PCh. 8 - Prob. 17PCh. 8 - Prob. 18PCh. 8 - Prob. 19PCh. 8 - Prob. 20PCh. 8 - Prob. 21PCh. 8 - Prob. 22PCh. 8 - Prob. 23PCh. 8 - Prob. 24PCh. 8 - Prob. 25PCh. 8 - Prob. 26PCh. 8 - Prob. 27PCh. 8 - Prob. 28PCh. 8 - Prob. 29PCh. 8 - Prob. 30PCh. 8 - Prob. 31PCh. 8 - Prob. 32PCh. 8 - Prob. 33PCh. 8 - Prob. 34PCh. 8 - Prob. 35PCh. 8 - Prob. 36PCh. 8 - Prob. 37PCh. 8 - Prob. 38PCh. 8 - Prob. 39PCh. 8 - Prob. 40PCh. 8 - Prob. 41PCh. 8 - Prob. 42PCh. 8 - Prob. 43PCh. 8 - Prob. 44PCh. 8 - Prob. 45P
Knowledge Booster
Similar questions
- ↑ Quiz x Chat × | Use ☑ Micr ☑ Price × b Ans × b Suco × b Anst ✓ Pow × 1.6: ✓ ECO ☑ #26 ☑ #27 ✓ #28 ✓ -0 -0 setonhall.instructure.com/courses/30968/quizzes/52774/take/questions/1035198 Question 15 2 pts Use the information contained in the graph below describing a firm operating in a competitive environment to answer the following question. If the graph described a firm that decides to produce, what would be the value of its profit, its deficit, or would it break even? $7 385 $8 $4 4 120 150 30 50 50 None of the answers are correct. #29 × N. price × | + ☆ ☑ B Relaunch to update :arrow_forward↑ Quiz: F X . ChatG × G Use th × b Answe × b Answe ☑ Micros ☑ Power × 1.6: A ☑ ECON ✓ #26 - X #27 - X #28 - X #29 - × G is mr c ×+ -o -0 setonhall.instructure.com/courses/30968/quizzes/52774/take/questions/1035213 Q ☆ B Relaunch to update : Question 9 2 pts Use the information contained in the three graphs below to answer the following question. Which of the three curves represent the MR? (A) (B) $800 $800 $800 $700 $700 $700 $600 $600 $600 $500 $500 $500 67 S S $400 $400 $400 $300 $300 $300 $200 $200 $200 $100 $100 $100 50 50 30 01 01 2 34 01 A None of the curves could be the answer. C B (C)arrow_forwardProfits will be_________? Group of answer choices High, regardless of the degree of rivalry between competitors. Low, when the degree of rivalry between competitors is low. High, when the degree of rivalry between competitors is high. Low, when the degree of rivalry between competitors is high.arrow_forward
- Not use ai pleasearrow_forwardQuestion 8 Which of the following is true about the concept of concentration? O All of the answers are correct. O O The lower the number of firms in a market, the lower the concentration. The higher the degree of rivalry amongst the firms, the lower the concentration. The lower the degree of rivalry amongst the firms, the higher the concentration. Previous 2 pts Next ->arrow_forwardQuestion 15 Price discrimination is usually defined as selling a product to different customers at The same price as costs of service are the same. Different prices even though costs of service are the same. The same price even though costs of service are different. Different prices as costs of service are different. ? 2 pts ◄ Previous Next -arrow_forward
- Question 22 2 pts Use the information contained in the three graphs below to answer the following question. Which of the three curves could display an efficiency scale? (A) 5800 $700 5600 $500 (B) $800 $700 (C) ccc $400 $300 $200 $300 $200 $100 $100 $400 $300 $300 $100 1 $800 $700 S $600 A None of the curves could be the answer. B C ◄ Previous Next ->arrow_forwardUse the information contained in the graph below to answer the following question. Which of the curves could represent marginal costs? O A C B O None of the curves could be the answer. B ◄ Previous Next ▸arrow_forwardNot use ai pleasearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Principles of Economics (12th Edition)EconomicsISBN:9780134078779Author:Karl E. Case, Ray C. Fair, Sharon E. OsterPublisher:PEARSON
Engineering Economy (17th Edition)EconomicsISBN:9780134870069Author:William G. Sullivan, Elin M. Wicks, C. Patrick KoellingPublisher:PEARSON
Principles of Economics (MindTap Course List)EconomicsISBN:9781305585126Author:N. Gregory MankiwPublisher:Cengage Learning
Managerial Economics: A Problem Solving ApproachEconomicsISBN:9781337106665Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike ShorPublisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...EconomicsISBN:9781259290619Author:Michael Baye, Jeff PrincePublisher:McGraw-Hill Education
Principles of Economics (12th Edition)
Economics
ISBN:9780134078779
Author:Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:9780134870069
Author:William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-...
Economics
ISBN:9781259290619
Author:Michael Baye, Jeff Prince
Publisher:McGraw-Hill Education