Being "early to market" with a new product often results in grabbing relatively high levels of market share. A newly noise canceling, high fidelity, specialty headphone with microphone is released for use in noisy control room settin test reviews were excellent. Development costs, adjusted to time 0, are $1,000,000. Quarterly incomes begin at $ of Q1 and ramp up to $400,000, $550,000, and $750,000 over the next three quarters. Then, they begin to drop b quarter for the next two years. Choose a quarter-by-quarter cash flow diagram covering financial results over thre A $750K B $750K $550K $550K $400K $400K $300K Till $300K 10 11 12 End of Quarter $150K (+) 0 (-) $300K 5 8 9 (+) 0 (-)

Being "early to market" with a new product often results in grabbing relatively high levels of market share. A newly noise canceling, high fidelity, specialty headphone with microphone is released for use in noisy control room settin test reviews were excellent. Development costs, adjusted to time 0, are $1,000,000. Quarterly incomes begin at $ of Q1 and ramp up to $400,000, $550,000, and $750,000 over the next three quarters. Then, they begin to drop b quarter for the next two years. Choose a quarter-by-quarter cash flow diagram covering financial results over thre A $750K B $750K $550K $550K $400K $400K $300K Till $300K 10 11 12 End of Quarter $150K (+) 0 (-) $300K 5 8 9 (+) 0 (-)

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Q6 solution needed
Chemitronix Ltd. is a microchips manufacturing company. It was found that the business is at the maturity stage, demanding some change. After rigorous research, management came up with the following decision variables.Expansion: 45% chance of gaining 1,500,00; 55% chance of losing XNew Product: 50% chance of gaining 900,000; 50% chance of losing 539740What must have been the value of expansion loss if expansion and new product will result to the same expected monetary values?
A manufacturer offers an inventor the choice of two contracts for the exclusive right to manufacture and market the inventor’s patented design. Plan 1 calls for an immediate single payment of $52,368. Plan 2 calls for an annual payment of $2,093 plus a royalty of $1.04 for each unit sold. The remaining life of the patent is 10 years. MARR is 10% per year.What must be the uniform annual sales to make Plan 1 and Plan 2 equally attractive?
There may be no correct option, or more than one correct option..
A Loader cost Ph 2,115,000 to purchase. Fuel, oil grease, and minor maintenance are estimated to cost Ph580 per operating hour. A set of tires cost Ph150,000 to replace, and their estimated life is 2,800 use hours. A Ph282,000 major repair will probably be required after 4,200hr of use. The equipment is expected to last for 8,400 hr, after which it will be sold at a price equal to 15% of the original purchase price. A final set of new tires will not be purchased before the sale. How much should the owner of the Dozer charge per hour of use, if it is expected that the machine will operate 1,400 hr per year? The company’s capital rate is 8%.
Machine A costs Q10,000.00, with a recovery value of Q4,000.00 at the end of 5 years and has annual expenses ofoperation of Q5,000.00 during the first three years and Q6,000.00 during the last 2. Machine B costsQ14,000.00, with a recovery value of Q3,000.00 at the end of 10 years. Its operating expenses amount to Q3,500.00annually during the 5 years and Q4,500.00 during the last 5. The increases in operating expenses are theexpected for maintenance, repair and loss of efficiency due to use. The minimum required rate of returnis 15%a) Make the graph and determine the annual cost and make the respective comparison between the two machines.b) Select the most feasible machine.c) Determine the future worth in year 10 for both machines.d) Determine the quarterly value during the 10 years for both machines.e) As an Engineer you are asked to determine an action plan, define objectives, activities to overcome the bestalternative and estimating a new NPV, which exceeds 15% the best optionf)…
An electric automobile can be purchased for $25,000. The automobile is estimated to have a life of 12 years with annual mileage of20,000 miles. Every three years, a new set of batteries will have to be purchased at a cost of $3,000. The $3,000 cost of the batteries is a net value with the old batteries traded in for the new ones. Annual maintenance of the vehicle is estimated to cost $700. The cost of recharging the batteries is estimated at $0.015 per mile. The salvage value of the batteries and the vehicle at the end of 12 years is estimated at $2,000. Consider the MARR to be 7%. What is the cost per mile to own and operate this vehicle according to these estimates?
Bulaklak Oil Company must install anti-pollution equipment in a new refinery in Bataan to meet clean air legislation. It is considering three types of equipment, and the following data are available:Use MARR = 20%, repeatability assumption and solution by PW.
Quick Computing currently sells 10 million computer chips each year at a price of $20 per chip. It is about to introduce a new chip, and it forecasts annual sales of 12 million of these improved chips at a price of $25 each. However, demand for the old chip will decrease, and sales of the old chip are expected to fall to 3 million per year. The old chips cost $6 each to manufacture, and the new ones will cost $8 each. What is the proper cash flow to use to evaluate the present value of the introduction of the new chip? Note: Enter your answer in millions.
A new manufacturing plant costs $530,000 to build. O&M are estimated to be $50,000 per year, and a salvage value of 25 percent of the initial cost is expected. The units the plant produces are sold for $60 each. Sales and production are designed to run 365 days per year. The planning horizon is 10 years. MARR is 10%. Determine the number of units that must be sold annually to achieve breakeven.
Par value is also known as Face value True False
Samsung Electronics is trying to reduce supply chain risk by makingmore responsible make/buy decisions through improved cost estimation. A high-usecomponent (expected usage is 5000 units per year) can be purchased for $25 perunit with delivery promised within a week. Alternatively, Samsung can make thecomponent inhouse and have it readily available at a cost of $5 per unit, ifequipment costing $150,000 is purchased. Labor and other operating costs areestimated to be $35,000 per year over the study period of 5 years. Salvage isestimated at 10% of first cost and MARR is 12% per year. Neglect the element ofavailability (a) to determine the breakeven quantity, and (b) to recommend makingor buying at the expected usage level.