Consider the following 2 alternatives. The cost and benefit information for the 2 alternatives is in the table below. A B Initial cost $ 6000        $ 12200 Benefit annual $ 1800        $ 2100 Useful life 4 years       8 years Residual value $ 500        $ 700 MARR 7% a) Using an 8-year analysis period, the equivalent Present Value for alternative A is $ Answer and the equivalent Present Value for alternative B is $ Answer

Q: a machine can be purchased at $15000 The annual maintenance costs are expected to increase by $800…

A: The value at which an asset is expected to be sold at the end of its useful life is known as salvage…

Q: is trying to decide between two equipment for a production activity. The following information is…

A:

Q: The costs and revenues of 2 alternatives for a machine are given below. Determine which alternative…

A: Net present value shows the difference between the cash inflow and cash outflow of present value…

Q: Alternative X has a first cost of 19000 an annual operating cost of 3500 , and a salvage value of…

A: The Present worth analysis is used by discounting their cash flow at a single of point of time at…

Q: Alpha Zeta is considering purchasing some new equipment costing $390,000. The equipment will be…

A: Average accounting rate of return is the ratio of average net income to average investment. Average…

Q: Compare the following two alternatives by the IRR method, given MARR of 6%/year. First find if they…

A: The internal rate of return (IRR) is a discounted cash flow method for calculating the rate of…

Q: You are considering an investment proj ect with the following financialin formation:(a) Required…

A: The firm should proceed with the project as it will give the company positive returns. Here is the…

Q: Using benefit–cost ratio analysis, determine which one of the three mutually exclusive alternatives…

A: We shall calculate the net present value of each alternative. The alternative having the highest net…

Q: The equipment needed to manufacture a product costs $1,000,000 to purchase. This equipment has a…

A: 1) Statement showing equivalent uniform annual cost associated with this equipment when 10.000 units…

Q: A challenger asset with a maximum useful life of 6 years has a first cost of $43,000 and an…

A: Equivalent uniform annual cost comprise of annual equivalent uniform of first cost less annual…

Q: A project has a first cost of $14,000, uniform annual benefits of $2,400, and a salvage value of…

A: Given:

Q: At the end of eight years, the estimated market value for Alternative A is ETB 2,000 and for…

A: Equivalent annual cost is the cost which purchaser of asset is required to incurred on annual basis…

Q: The maintenance costs of a new boiler are estimated as follows: P 600 per year for the first 3…

A: As per question , we are provided : Future value of all maintenance = P20000 Compounding rate = 6%…

Q: Consider the following alternatives for a heating system: Alternative A: Rent a heating system at a…

A: Alternative A Initial cost = Installation cost = $300 Annual cashflow = Annual cost saving - Annual…

Q: Consider the following altematives for a heating system: Alternative A: Rent a heating system at a…

A: Here, Here, we will use Net Present Worth to choose the best alternative.

Q: You are presented th three proposals. Proposal 1 includes a first cost of 5,000 e vell as an annual…

A: The viability of a project is the primary consideration in project selection. Project ideas must be…

Q: EXCEL, an equipment costing $100,000 has a useful life of 6 years. It has a resale value of $8,000.…

A: given information equipment costing = $100,000 useful life= 6 years resale value = 8000 annual cost…

Q: Alternative X has a first cost of 22000 an annual operating cost of 4100 , and a salvage value of…

A: A method of capital budgeting that helps to evaluate the present worth of cash flow and a series of…

Q: An aggregate crasher is expected to cost P60, 000 and has an estimatedlife of 5 years. Maintenance…

A: Here we will use the concept of time value of money. As per the concept of time value of money the…

Q: Compare the following two altematives by the IRR method, given MARR of 6'year First find if they are…

A: Here, MARR is 6%

Q: Colaw Company is considering buying equipment for $240,000 with a useful life of five years and an…

A: THE AVERAGE INVESTMENT METHOD DIVIDES THE AVERAGE INFLOW OR INCOME EXPECTED FROM THE PROJECT BY THE…

Q: Compare the two following alternatives in terms of present worth using MARR = 4% for a study period…

A: Present worth is the sum of present value of cash flows.

Q: For a 12-year service at a farm, two machines are being taken into consideration. The favorable rate…

A: Annual cost is the estimated amount which the firm has to spend each year based on prevailing…

Q: An electric power generating project has a first cost of $447,946 and annual operating costs of…

A: Interest rate = 10%   Calculation of present value Year Cash outflow PVF(10%,Year) Present value…

Q: Determine the NPW, AW, FW and IRR of the following engineering project. • Initial Cost ($400,000) •…

A: The difference between the current value of cash inflows and outflows over a period of time is known…

Q: The Road agency is planning to build a new bridge and is considering two distinct configurations.…

A: solution given Life of projects 7 years Rate of return expected 9%   Calculation of…

Q: from the following facts,for the sum of years digits what is given: cost : $15,000 residual value…

A: Sum-of-the-years'-digits = 1+2+3+4 = 10 years

Q: Given the following information, what is the financial break-even point? Initial investment =…

A: Given that: Fixed cost=$58000 price=$130 variable cost per unit=$95 Thus formula of financial break…

Q: The Larkspur Furniture Company needs a new grinder. Compute the present worth for these mutually…

A: Net present worth is defined as the present value of the total cash flows over a period. In other…

Q: We are considering the introduction of new product. Currently we are in the 27% tax bracket with a…

A: Initial Outlay is outflows of cash that are made by firm to initiate project. It includes equipment…

Q: Consider the following 2 alternatives.   Alternative A Initial cost: $10,000   Mainteinance anual…

A:

Q: Calculate the profitability of the following proposal using the Average rate of return (ARR) method…

A: Capital budgeting approaches are the adoption of various methods that are used by management in…

Q: A company must invest in one of two alternatives. Alternative Alternative B A Initial Cost $774,542…

A: Here, MARR is 5.80% Investment Period is 4 years

Q: A company with a MARR of 10% must install one of two production machines. The economic parameters of…

A: Project Y MARR = 10℅ Initial cost = $22,000 Salvage value = $1,000 Service  Life = 6 Years Time…

Q: An engineer with Haliburton calculated the AW values shown for retaining a presently owned machine…

A: Economic service life refers to the period of useful life that reduces the corresponding annual cost…

Q: Alternative I has a first cost of $50,000, will produce an $18,000 net annual benefit over its…

A: GIVEN, r=15% year I II 0 -50000 -1,50,000 1 18000   2 18000   3 18000   4 18000   5…

Q: Suppose that the new equipment has a cost basis of $12,000 and a salvage value of $3,0 of 6 years.…

A: The cash flow that is produced by the equipment consider the tax benefits of the depreciation so…

Q: A "standard" model of a dozer costs $20,000 and has an annual operating expense of $450. The dozer…

A: Opportunity cost = 5% As per information Calculation  of present value of each option Year…

Q: As an engineer, you have been asked to recommend a new cooling system for a large warehouse. You…

A:

Q: Check whether the project is accepted or rejected and recommend the best project, MARR=6% and n=8…

A: We will solve the question using Payback period and Net Present Value (NPV) method. Payback period…

Q: Given the following information, what is the financial break-even point? Initial investment =…

A: The financial break-even point is the level of earnings where earnings per share are zero. In other…

Q: 1. Each alternative has a 10-year useful life and have no salvage value. If the MARR is 8%, which…

A: Before investing in new assets or projects, profitability is evaluated by using various methods like…

Q: Alternative R has a first cost of $94,000, annual M&O costs of $66,000, and a $20,000 salvage value…

A: Introduction:- An alternative cost is a probable benefit that could have been acquired but wasn’t…

Q: One oil company is considering 5 pipe sizes for a new pipeline. The costs for each of them are given…

A: The question is based on the concept of capital budgeting for decision making. Here  present value…

Q: A proposed geothermal energy project has an initial cost of $1,000K. In addition it will re- quire…

A: The annual worth method is one of the methods of finding out the value of a project.

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.