Consider three alternatives A, B, and "do-nothing." (a) Graph the NPW for the alternatives and construct a choice table for interest rates from 0% to 25%. B Year A 0 1-5 3,200 -$10,000-$15,000 4,500
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- Ch 5 Economics A proposed project will cost $1,000 two years from today. Beginning at the end of year five, $300 in annual benefits will be received, continuing until the end of year nine. What is the project's present (year 0) worth at MARR = 4%? A. none of these B. $130 C. $111 D. $217 E. $250Determine the net present worth (NPW) of the cash flows given in table below for an investment opportunity being presented to a company. MARR =12% Year 0 1-10 11-15 16-25 26-30 Cash Flow -$100K 10K 20K -5K 30K Group of answer choices $90,030 $80,914 $72,916 $112,200A proposed project has the following costs and benefits. Using linear interpolation, the project’s discounted payback period (use i=10%) is _____________. Year Costs Benefits 0 $4,000 1 $1,200 2 $1,200 3 1,000 4 1,000 5 3,000 6 2,000 A. 6.35 years B. 5.82 years C. 4.24 years D. 3.37 years
- 20. A proposed project will cost $1,400 five (5) years from today. Beginning at the end of year six, $500 in annual benefits will be received, continuing until the end of year nine. What is the project’s present (year 0) worth at MARR = 10%? A. $129.63 B. $147.24 C. $114.87 D. $106.58Consider a palletizer at a bottling plant that has a first cost of $150,000, operating and maintenance costs of $17,500 per year, and an estimated net salvage value of $25,000 at the end of 30 years. Assume an interest rate of 8%. What is the present equivalent cost of the investment if the planning horizon is 30 years? a. $335,000. b. $344,500. c. $360,000. d. $395,500.Consider three alternatives A, B, and "do-nothing." (a)Construct a choice table for interest rates from 0% to 100%. \table[[Year,A,B],[0,-$10,000,-$15,000
- Here, for an alternative with an initial cost of $350 and an annual benefit of $47.50 that increases by $10 each years. use a 8-year useful life and an 6%MARR to calculate: A. Future worth? B. Standard Benefit-cost Ratio? (Find both)14.28 A new toll bridge is to be constructed over the Green River at a cost of $120M. The bridge requires maintenance costing $4000 annually over its 50-year life. Every 10 years, the bridge will require repainting at a cost of $1M. The value to motorists using this bridge is estimated to be $1.60 per trip. If the interest rate is 10% and 25,000 vehicles per day travel over the bridge, how much toll should be charged for each crossing? Rounding that toll up to the nearest nickel, what is the consumers’ surplus? 14.29 A dam may be built at a cost of $10M to elimi- nate the periodic flooding that Lowville experi- ences. That flooding averages a cost of $300K per year. Additional expenses can be incurred to divert water to another area for irrigation, to add electric power generation, and to permit recre- ation. Which alternative is best? Since political support is crucial, allocate the costs to the uses. The…1.b You are faced with a decision on an investment proposal. Specifically, the estimated additional income from the investment is $125,000 per year; the investment cost is $400,000; and the first year estimated expense of $20,000 and will increase a rate of 5% per year. Assume an 8-year analysis period, no salvage value, and MARR = 15% per year. What is the ERR ( Ԑ=MARR) of this proposal? show whole solution, not in excel please
- 4) Which of the following power plants is better investment, assuming 8% interest on the sinking fund and no salvage value in either case, taxes/insurance at 10% and interest on capital at 12%. Use ROR and Present Worth Method. - Coal plant which costs P1M, last 10 years and cost annually P100k to operate. - Fuel-oil plant which costs P800k will last 7 years and cost annually P70k to operate.Three mutually exclusive alternatives are being considered. A B C Initial Investment $50,000 $22,000 $15,000 Annual Net Income $5,093 $2,077 $1,643 Rate of Return 8% 7% 9% Each alternative has a 20-year useful life with no salvage value. If the MARR is 7%, which alternative should be selected? (ANS: ∆IRRB-C=2.14%, Eliminate B, ∆IRRA-C=7.56%, Select A) How do you work this out?A major equipment purchase is being considered by Metro Atlanta. The initial cost is determined to be $1,000,000. It is estimated that this new equipment will save $100,000 the first year and increase gradually by $50,000 every year for the next 6 years. MARR=10% a. Using Benefit- Cost analysis, what is the Benefit/Cost ratio for this equipment purchase? b. Based on the Benefit/Cost analysis should Metro Atlanta purchase the equipment?