ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- Compare three alternatives on the basis of their capitalized costs at /= 11.00% per year and select the best alternative. (Include a minus sign if necessary.) Alternative First Cost AOC, per Year Salvage Value Life, Years E $75000 $-55000 $19000 2 The capitalized cost of alternative E is $ The best alternative is (Click to select) F $-315000 $16000 $69000 4 . alternative F is $ G $ 815000 $-4000 $400000 90 and alternative G is $arrow_forwardStandby power for pumps at water distribution booster stations can be provided by either gasoline-or diesel-powered engines. The costs for the gasoline engines are as follows: Gasoline First cost, $ Annual M&O, $ per year Salvage value, $ Life, years - 150,000 -41,000 23,000 15 The incremental PW cash flow equation associated with (diesel – gasoline) is 0 = -40,000 + 11,000 (P/A, i, 15) + 16,000(P/F, i, 15) Determine the following: (a) First cost of the diesel engines (b) Annual M&O cost of the diesel engines (c) Salvage value of the diesel enginesarrow_forwardCompare the alternatives C and D on the basis of a present worth analysis using an interest rate of 13% per year and a study period of 10 years. Alternative C $-46,000 $4,000 $-1,300 $6,000 10 First Cost AOC, per Year Annual Increase in Operating Cost, per Year Salvage Value Life. Years The present worth of alternative C is $1 (Click to select) offers the lower present worth. HELIME BIEN D $-20,000 $-7,500 $-100 $1,300 5 and that of alternative D is $ Aarrow_forward
- 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 $arrow_forwardK Consider the following EOY cash flows for two mutually exclusive alternatives (one must be chosen). The MARR is 4% per year. Capital investment Annual expenses Useful life Market value at end of useful life The PW of the Lead Acid is $ The PW of the Lithium Ion is $ Click the icon to view the interest and annuity table for discrete compounding when i = 4% per year. (a) Determine which alternative should be selected based on the PW method. Assume repeatability and use a study period of 18 years. Lead Acid Lead Acid $7,000 $2,250 6 years $0 Lithium Ion Lithium Ion $13,000 $2,300 9 years $2,600 Which alternative should be selected? Choose the correct answer below. The AW of the Lead Acid is $ The AW of the Lithium lon is $ Lead Acid Lithium Ion (Round to the nearest dollar.) (Round to the nearest dollar.) (b) Determine which alternative should be selected based on the AW method, also assuming repeatability. . (Round to the nearest dollar.) (Round to the nearest dollar.) Which…arrow_forwardUsing Incremental with EUAW analysis find the best alternative, MARR = %10. should use Excel and show your equations seperately, see below example: [A Benefit - [IC (A/P, i%, n) - Salvage (A/F, i, n)] + A Cost+ G Cost (A/G, i, n)] Data B C A First Cost $2,300,000 $2,780,000 $2,540,000 Salvage Value $82,000 $118,000 $97,000 Annual Benefit $580,000 $670,000 $650,000 M&O $65,000 $78,000 $71,000 M&O Gradient $11,000 $15,000 $12,500 Useful Life, Years 9 9 9 You - ZOOMarrow_forward
- Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather conditions. One alternative must be selected. Estimated installation cost and annual savings in heat loss are given below. \table[[\table[[Insulation], [ Thickness]], Installed Cost, \table[[Annual Savings in], [ Heat Loss]], Life of Insulation], [2cm, $20,000, $6,900 per year,4 years], [3cm, $35,000, $9,000 per year, 6 years]] The MARR = 10% per year. The study period is 12 years. Draw the cash flow diagram for each alternative over the entire study period. Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather conditions. One alternative must be selected. Estimated installation cost and annual savings in heat loss are given below. Insulation Thickness 2cm Installed Cost $20,000 $35,000 Annual Savings in Heat Loss $6,900 per year $9,000 per year Life of Insulation 4 years 6 years 3cm = The MARR 10% per year. The study period…arrow_forwardStreet lighting fixtures and their sodium vapor bulbs for a two-block area of a large city need to be installed at a first cost (investment cost) of $130,000. Annual maintenance expenses are expected to be$6,500for the first8years and$8,500 each year thereafter upto 25years. With an interest rate of 9% per year, what is the present worth cost of this project? Choose the closest answer below. A) $202,422 B $238,597 C) $249,468 D) $277,339arrow_forward(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%arrow_forward
- Example A company is considering two types of equipment for its manufacturing plant. Pertinent data are as follows: Freeze Type A Type B First cost P200,000 P300,000 Annual Operating Cost P32,000 P24,000 D Annual Labor Cost P50,000 P32,000 Insurance and Property Taxes 3% 3% Payroll Taxes 4% 4% Estimated Life TO 10 If the minimum required rate of return is 15%, which equipment should be selected?arrow_forwardThe General Hospital is evaluating new office equipment offered by three companies. Cost Annual benefit End of useful life salvage value Useful life (yrs) Select one: 9.5% 8.5% 7.5% Company A $500 $130 $0 10.5% 5 The incremental rate of return between Company B and Company C is close to Company B $600 $115 $250 5 Company C $700 $100 $180 10arrow_forwardWall’s Pharmacy will have to sell a new product that has an estimated revenue of $5,100 per month and costs of $1,000 per month with an initial purchase of $28,000. How long will Wall's Pharmacy have to sell a new product if the MARR is 3% per month? Wall's Pharmacy will have to sell a new product for __ months.arrow_forward
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