For alternatives shown in the table below and on the basis of their capitalized costs CC and an interest rate of 10% per year. Answer the following questions to select the better option:Alternative45,0255.000Fist cost 5249.85413,000Maintenance costs, 1 per yearSalvage valuPeriodic costs Severy 10 yearse years2.00010,00010.0004.CC for alternative A

Here we calculate the capitalized cost of the both machines by using the given information , so the…

For aternatives shown in the table below and on the basis of their capitalized.costs. CC and an interest rate of 10% per year. Answer the following questions to select the better öptlon: Aternative Fist cost Maintenance costs per year Salvage valu Periodic costs Iney 10year Ufe, years 249,854 13.000 10,000 10.000 45,025 5.000 2.000 4. CC for alternative A

For aternatives shown in the table below and on the basis of their capitalized.costs. CC and an interest rate of 10% per year. Answer the following questions to select the better öptlon: Aternative Fist cost Maintenance costs per year Salvage valu Periodic costs Iney 10year Ufe, years 249,854 13.000 10,000 10.000 45,025 5.000 2.000 4. CC for alternative A

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 10E

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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
Using the cash flow shown below decide which alternative is the most economical using (a) Annual Worth analysis and (b) Present worth analysis. What should be the first cost of the two other alternatives to breakeven with the selected alternative using (c) Present Worth analysis and (d) Annual Worth Analysis. MARR is 10% A B C First Cost, Php -90,000 -400,000 -650,000 Annual Cost. Php/year -40,000 -20,000 -13,000 Overhaul every 10 years, Php -- -- -80,000 Salvage Value, Php 7,000 25,000 200,000 Life, years 3 10 INFINITY
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?
The cash flows for the following four alternatives are given below. You may assume the benefits occur throughout the year rather than just at the end of the year. Based upon payback period, the alternative that should be selected is given by the following option: Year A B C D 0 -$1000 -$900 -$950 -$2783 1 200 100 350 1200 2 200 200 350 1200 3 1200 300 350 1200 4 1200 300 350 1200 5 1200 700 350 1200 Group of answer choices B C A Select none D
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
consider the follow EOY cash flows for two mutually exclusive alternative (one must be chosen). The MARR is 4% per year. Lead Acid: capital investment:$7000 Annual expenses: $2750 Useful life: 12 years market value at end of useful life: $0 Lithium Ion: capital investment:$14000 Annual expenses: $2300 Useful life: 18 years market value at end of useful life: $2600. Determine which alternative should be selected if the repeatability assumption applies. Use AW method
USE PRESENT WORTH. Show complete solution and cash flow diagram There is a continuing requirement for stand by electrical power at a public utilityservice facility. Alternative A involves an initial cost of $72,000, a 3-year useful life.and an annual cost of $2,200 the first year and increasing $300 per year thereafterand a net salvage value of $8,400 at the end of the useful life. Alternative B has aninitial cost of $90,000. a six-year useful life, and annual cost of 2,100 and a netsalvage value of $13,000. The current interest rate is 10% annually. Whatalternative are you going to recommend if you use the repeatability (studyperiod is 6 years) and co terminated (study period is 3 years, epsilon = 10%) assumptions?
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.
When assessing mutually exclusive alternatives using Present Worth Analysis, which alternative/alternatives should be selected? a. Select none unless all PW are positive b. Select all with positive PW c. Select the alternative with the most positive PW d. Discard the negative PW and select all with positive PW In assessing an alternative, the capital recovery is found to be $ -2.47 (millions). What is this proper interpretation of this number? a. annually the alternative must have net revenues of at least $2.47 to recover the initial cost at a required MARR b. the alternative will lose $ 2.47 annually c. The AW is $ -2.47 d. The alternative will recover $ -2.47 annually once in operation
A design change being considered by Mayberry, Inc., will cost $6,000 and will result in an annual savings of $1,000 per year for the 6-year life of the project. A cost of $2,000 will be avoided at the end of the project as a result of the change. MARR is 8%/yr. Solve, a. What is the internal rate of return of this investment? b. What is the decision rule for judging the attractiveness of investments based on internal rate of return? c. Should Mayberry implement the design change?
The survey firm of Layer, Anderson, and Pope (MAP) LLP is considering the purchase of a pieceof new GPS equipment. Data concerning the alternative under consideration are presented below.First Cost $28,000Annual Income 7,000Annual Costs 2,500Recalibration at end of Year 4 4,000Salvage Value 2,800If the equipment has a life of eight years and MAP’s minimum attractive rate of return (MARR) is5%, what is the annual worth of the equipment?
A municipal police department has decided to acquire an unnamed drone for aerial surveillance of a high-crime region in the city. Two drones are being studied and their data are provided in the table below. All alternatives are expected to have negligible salvage values at the end of 5 years. The police department's MARR is 8% per year. Which drone should be selected based on a. RORAI method? b. Annual Worth method? A Alternative Capital investment $740,000 Annual expenses $361,940 B Alternative Capital investment 1,840,000 Annual expenses $ 183,810