16. Solve the given question and give the correct answer. (A)(B)UAlternative A: $-89,770Alternative B: $-66,120Alternative Bis selectedAlternative A: $-54,321Alternative B: $-44,410Alternative Bis selectedAlternative A: $-65,410Alternative B: $-71,874Alternative Ais selectedAlternative A: $-77,722Alternative B: $-121,116Alternative Ais selected Compare two alternatives, A and B, on the basis of a present worth evaluation using i = 8% per year and a study period of 8 years.AlternativeFirst CostAnnual Operating CostOverhaul in Year 4Salvage ValueLifeA$-38,000$-9,000$-3,450$4,6008 yearsB$-20,000$-6,000$0$2,4004 years

The present worth of an annuity is the current value of future payments from an annuity, given a…

Answered: Compare two alternatives, A and B, on…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Need AsapIllustrate the cashflow diagram and compute for the payback period for a project with the following characteristics, if the minimum attractive rate of return (MARR) is 10%? First Cost $20,000 Annual Benefits $8,000 Annual Maintenance $2,000 in year, then increasing by $500 per year Salvage Value $2,000 Useful Life10 years
A dyeing and finishing plant is interested in acquiring a dyeing machine for the production of a new product. Three alternatives are being considered assummarized below. Which alternative should be recommended if the plant’sMARR (hurdle rate) is 15% per year using (a) the IRR method and (b) the annual worth method?
NASA is considering two materials for use in a space vehicle tracking station in Australia. The estimates are shown below. Which should be selected on an economic basis of present worth values at an interest rate of 10% per year? Material M FF First cost, $ −205,000 −235,000 Maintenance cost, $/year −29,000 −27,000 Salvage value, $ 2,000 20,000 Life, years 2 4
Compare two alternatives for a physical security system surrounding a power distribution substation using annual worth analysis and a MARR of 10% per year. System Condi Torro First cost, $ −25,000 −130,000 M&O cost, $ per year −9,000 −2,500 Salvage value, $ 3,000 100,000 Life, years 3 ∞
Determine the present worth, future worth, and annual worth of the following engineering project when the MARR is 15% per year. Is the project acceptable? Investment cost $10,000Expected life 5 yearsMarket (salvage) value $1,000Annual receipts $8,000Annual expenses $4,000
Deere Construction just purchased a new track hoe attachment costing $12,500. The CFO, John,expects the implement will be used for five years when it is estimated to have a salvage value of$4,000. Maintenance costs are estimated to be $0 the first year and will increase by $100 eachyear thereafter. If a 12% interest rate is used, what is the equivalent uniform annual cost of theimplement?
A company is trying to decide whether to keep a fork-truck in their factory or to purchase a new one. The existing fork-truck can be sold now for $28,000 or kept for another 5 years with an overhaul now costing $8,250. If the MARR is 10% should the company buy a new AVG now or keep the existing vehicle? Existing Fork-truck New Fork-truck Initial price cost, $ -34,250 (5 yrs ago) -38,250 AOC, $ -5,500 -7,800 Salvage value, $ 2,500 5,500 Life, yrs 10 12
4. Incremental ROR and B/C methods require the LCM of the two alternatives being compared. Select one: True False
Duke Construction just purchased a new track hoe attachment costing $12,500. The CFO, John,expects the implement will be used for five years when it is estimated to have a salvage value of$4,000. Maintenance costs are estimated to be $0 the first year and will increase by $100 eachyear thereafter. If a 12% interest rate is used, what is the equivalent uniform annual cost of theimplement?
The Logan Well Services Group is considering two sites for storage and recovery of reclaimed water. The mountain site (MS) will use injection wells that cost $4.2 million to develop and $280,000 per year for M&O. This site will be able to accommodate 150 million gallons per year. The valley site (VS) will involve recharge basins that cost $11 million to construct and $400,000 per year to operate and maintain. At this site, 720 million gallons can be injected each year. If the value of the injected water is $3.00 per thousand gallons, which alternative, if either, should be selected according to the B/C ratio method? Use an interest rate of 8% per year and a 20-year study period. The B/C ratio is . Select alternative (Click to select) neither of the alternatives mountain site valley site .
A one-mile section of a roadway in Florida has been washed out by heavy rainfall. The county is considering two options for rebuilding the road. Pertinent data are presented below. If the county's MARR for this type of project is 9% per year, which replacement option should be chosen? Assume repeatability. 1) The equivalent uniform annual cost for the asphalt option is $ ? 2) The equivalent uniform annual cost for the concrete option is $ ? 3) Select the ? option.
An investment of $10,000 can be made that will produce a uniform annual of $5,500 for five years and then have a market (salvage) value of $2,000. Annual expenses will be $3,150 each year. The company is willing to accept any project that will earn 10% per year or more, on all invested capital. Using future worth method, what is the future values of the annual profit?

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Compare two alternatives, A and B, on the basis of a present worth evaluation using / = 8% per year and a study period of 8 years. Alternative First Cost Annual Operating Cost A $-38,000 $-9,000 B $-20,000 $-6,000