Give correct answer with explanation? D- The interest rate that makes Alternatives A and B equivalent is in what range?80Year Alt. A Alt. B- $1000$300001234LO5100100100200200500550600650700(a) Less than 2%(b) Between 2 and 5%(c) Greater than 5%(d) There is no interest rate that equates these two cash flow series.

(b) Between 2% and 5%Explanation:Answer image:The rate of return, also known as the weighted average…

Answered: D- The interest rate that makes…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

A firm is considering the “make vs. buy” question for a subcomponent. If the part is made in-house, the production data would be: first cost = $350, 000; annual costs for operation = $45, 000; salvage value = $15, 000; project life = 5 years; interest = 10%; and material cost per unit = $8.50. If annual production is 10,000 units, the maximum amount that the firm should be willing to pay to an outside vendor for the subcomponent is nearest? (a) $10 per unit (b) $16 per unit (c) $22 per unit (d) $28 per unit?
4. A government is planning to implement a new traffic control and surveillance system. The maintenance cost of the system is $1,200,000 per year. It is believed that the new system can help 3,000 driver saving 8 hours per year. The average wage of the people in this country is $150 per hour. It is expected that the system can be used for 5 years, i.e., the first benefit and cost are B1 and C1 respectively, while the last are B5 and C5. (a) What is the value of time saved by the new system per year? (b) Suppose the market interest rate is 5%. Calculate the net present value of this system. Should the system be launched? (c) Suggest two reasons to explain why the market interest rate in part (b) may be too high to evaluate the project. Should the system be launched if the interest rate is adjusted according to your suggestions?
Municipal Engineer wants to evaluate three alternatives for supplementing the water supply. 1st alternative – continue deep well pumping at an annual cost of $10,500 2nd alternative – install a 10” pipeline from a surface reservoir. First cost is $25,000 and annual pumping cost is $7,000 3rd alternative – install a 20” pipeline from the reservoir. First cost of $34,000 and annual pumping cost of $5,000. Life of all alternatives is 20 years. For the second and third alternatives, salvage value is 10% of first cost. With interest at 8%, which alternative should the engineer recommend? Use present worth analysis PW (deepwell) = ? PW (10”pipeline) = ? PW (20”pipeline) = ?
A city has developed a plan to provide for future municipal water needs. The plan proposes an aqueduct that passes through 150 meters of tunnel in a nearby mountain. Two alternatives are being considered. The first proposes to build a full-capacity tunnel now for $556 000. The second proposes to build a half capacity tunnel now and a second identical half-capacity tunnel in 20 years. Each of half capacity tunnel costs $402 000. The maintenance cost of the tunnel lining for the full-capacity tunnel is $40 000 every 10 years, and for each half-capacity tunnel it is $32 000 every 10 years. The friction losses in the half-capacity tunnel will be greater than if the full-capacity tunnel were built. The estimated additional pumping costs for each half-capacity tunnel will be $2 000 per year. Using present worth method and a 7% interest rate, which alternative should be selected? Give typing answer with explanation and conclusion
Plz solve asap handwritten solution acceptable
A series of alternative projects have the following series of discount annualized costs and benefits. Which project is your best choice? What is your second-best choice? Please list your calculation details. Project Alternative A B C D E Present Value of Benefits 100 160 90 70 180 Present Value of Costs 60 90 40 30 120
A company has annual fixed costs of $2,500,000 and variable costs of 0.15¢ per unit produced. For the firm to break even if they charge $1.85 for their product, the level of annual production is nearest to what value? (a) 375,000 units (b) 1,315,789 units (c) 1,351,351 units (d) 1,562,500 units
Please no written by hand and no emage Solve in excel Carp, Inc. wants to evaluate two machines for packaging their products.Machine A:Initial cost is $700,001st year O&M cost is 18,000; this cost increases $900 each year.The annual benefits are $154,000It can be sold at the end of 10 years useful life for $145,000 Machine B:Initial cost is $1,600,001st year O&M cost is 28,000; this cost increases $650 each year.The annual benefits are $300,000It can be sold at the end of 20 years useful life for $210,000The companies uses an interest rate of 15% Use annual cash flow analysis to decide which is the most desirable alternative.
Choose the correct At what stage of the purchasing decision-making process should the criteria be established on the basis of which the selection will be made? a. Evaluate the decision. B) Decision-making. C) Evaluation of alternatives. D) Realizing the need.
3) The cost of painting the public bridge is $15000. If the bridge is painted now and every 7 years, what is the capitalized cost (CC) of painting at an interest rate of 10% per year. a.-16650 b.-155000 c.-35750 d. -55990 e.-31500
7. Two machines are considered for purchase. Assume 10% interest, Use Benefit Cost analysis. Machine X Machine Y Initial Cost $200 $700 Uniform annual benefit $95 $120 Salvage value $50 $150 Useful life in years 6 12 a. Which machine should be bought? b. List the decision guideline for single project c. List the selection rule for incremental analysis d. List the procedures for the incremental analysis. Solve all this question......you will not solve all questions then I will give you down?? upvote.....
Pls solve it, subject-engineering economics and costing

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS