Answer it correctly please. I will rate accordingly Based on the incremental return shown and the company's MARR of 18% per year,the alternative that should be selected isThe project initial costs are such that A < C < B.Comparison Rate of Return,(A - DN)17(B - DN )25(C- DN)19(B -A)15(C-A)17(B -C)12Cannot be determined.Alternative DNO Alternative AAlternative BAlternative C

Based on the incremental return shown and the company's MARR of 18% per year . The project initial…

Answered: Answer it correctly please. I will rate…

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

The capital fund for new investment at Systems Corporation is limited to $75,000 for next year. You have been asked to recommend one or more of three projects as economically acceptable for investment at the corporate MARR of 15% per year. Perform the analysis in two ways: (a) by hand, and (b) using NPV functions and a spreadsheet. Initial Annual NCF, Life, Salvage Project Investment, $ $/Year Years Value, $ A −25,000 6,000 4 4,000 B −30,000 9,000 4 −1,000 C −50,000 15,000 4 20,000
Five mutually exclusive cost alternatives that have infinite lives are under consideration for decreasing the fruit-bruising rates of a thin skin-fruit grading and packing operation (peaches, pears, apricots, etc.). The initial costs and cash flows of each alternative are available. If the MARR is 15% per year, the one alternative to select is: Alternative A B C D E Initial cost, $ −11,000 −12,000 −9,000 −14,000 −15,000 Cash flow, $ per year −1000 −900 −1400 −700 −300 (a) A (b) B (c) D (d) E
A drug store is looking into the possibility of installing a 24/7-automated prescription refill system to increase its projected revenues by $20,000 per year over the next 5 years. Annual expenses to maintain the system are expected to be $5,000. The system will cost $50,000 and will have no market value at the end of the 5-year study period. The store’s MARR is 20% per year. Use the AW method to evaluate this investment.
Consider two air-conditioning systems with the estimates below. (a) Use AW analysis to determine the sensitivity of the economic decision to MARR values of 4%, 6%, and 8% per year. (b) Develop the spreadsheet functions that will display the six AW values. System 1 2 First cost, $ −10,000 −17,000 AOC, $ per year −600 −150 Salvage value, $ −100 −300 New compressor and motor cost at midlife, $ −1,750 −3,000 Life, years 8 12
For the cash flows shown, determine the incremental cash flow between machines B and A (a) in year 0, (b) in year 3, and (c) in year 6. Machine A B First cost, $ −15,000 −25,000 AOC, $ per year −1,600 −400 Salvage value, $ 3,000 6,000 Life, years 3 6
In most engineering economy studies, the best alternative is the one which:a. Will last the longest timeb. Is the easiest to implementc. Costs the leastd. Is the most politically correct
Mid-Valley Industrial Extension Service, a state-sponsoredagency, provides water quality sampling services toall business and industrial firms in a 10-county region.Last month, the service purchased all necessary lab equipmentfor full in-house testing and analysis. Now, an outsourcingcompany has offered to take over this function ona per-sample basis. Data and quotes for the two optionshave been collected. The MARR for government projectsis 5% per year and a study period of 8 years is chosen.In-house: Equipment and supplies initially cost$125,000 for a life of 8 years, an AOCof $15,000, and annual salaries of$175,000. Sample costs average $25.There is no significant salvage valuefor the equipment and supplies currentlyowned.Outsourced: Cost averages $100 per sample for thefirst 5 years, increasing to $125 persample for years 6 through 8. Determine the breakeven number of tests between the two options.
Mid-Valley Industrial Extension Service, a state-sponsoredagency, provides water quality sampling services toall business and industrial firms in a 10-county region.Last month, the service purchased all necessary lab equipmentfor full in-house testing and analysis. Now, an outsourcingcompany has offered to take over this function ona per-sample basis. Data and quotes for the two optionshave been collected. The MARR for government projectsis 5% per year and a study period of 8 years is chosen.In-house: Equipment and supplies initially cost$125,000 for a life of 8 years, an AOCof $15,000, and annual salaries of$175,000. Sample costs average $25.There is no significant salvage valuefor the equipment and supplies currentlyowned.Outsourced: Cost averages $100 per sample for thefirst 5 years, increasing to $125 persample for years 6 through 8. Use a spreadsheet to graph the AW curves for both options for test loads between 0 and 5000 per year in increments of 1000 tests. What is the…
Ken Allen, capital budgeting analyst for Bally Gears, Inc., has been asked to evaluate a proposal. The manager of the automotive division believes that replacing therobotics used on the heavy truck gear line will produce total benefits of $516,000 (in today's dollars) over the next 5 years. The existing robotics would produce benefits of $387,000 (also in today's dollars) over that same timeperiod. An initial cash investment of $206,400 would be required to install the new equipment. The manager estimates that the existing robotics can be sold for $72,000. Show how Ken will apply marginal cost-benefit analysistechniques to determine the following:a. The marginal benefits of the proposed new robotics.b. The marginal cost of the proposed new roboticsc. The net benefit of the proposed new robotics.
The U.S. Army received two proposals for a turnkey design/build project for barracks for infantry unit soldiers in training. Proposal A involves an off-the-shelf “bare-bones” design and standard grade construction of walls, windows, doors, and other features. With this option, heating and cooling costs will be greater, maintenance costs will be higher, and replacement will occur earlier than proposal B. The initial cost for A will be $750,000. Heating and cooling costs will average $6000 per month with maintenance costs averaging $2000 per month. Minor remodeling will be required in years 5, 10, and 15 at a cost of $150,000 each time in order to render the units usable for 20 years. They will have no salvage value. Proposal B will include tailored design and construction costs of $1.1 million initially with estimated heating and cooling costs of $3000 per month and maintenance costs of $1000 per month. There will be no salvage value at the end of the 20-year life. Which proposal should…
Chevron Corporation has a capital and exploratory budget for oil and gas production of $19.6 billion in one year. The Upstream Division has a project in Angola for which three offshore platform equipment alternatives are identified. Use the present worth method to select the best alternative at 12% per year.
The Helstrom Corp. is a subcontractor in field operations to Boeing Company, manufacturer of the F18 Super Hornet multiple strike fighter aircraft. Helstrom is about to purchase diagnostics equipment to test on-board electronics systems. Estimates are: First cost $8,000,000 Annual operating cost $100,000…

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

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

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

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

SEE MORE TEXTBOOKS