hated capital investment amounts and annual expenses are as follows: Design End-of-Year ER1 ER2 $115,000 $81,200 1 $ 29,000 $19,750 2 $ 29,150 $19,750 $ 29,300 $19,750 4 $ 29,450 $19,750 $ 29,600 $19,750 5 $ 29,750 $19,750 6 me that the MARR is 12% per year, the study period is six years, and the salvage value is zero for all designs. Using incremental analysis procedure, 10%, What is the NPV of the project? Round off your answer to whole number.
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- 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.YOUR QUESTION IS: 2. Three mutually exclusive design alternatives are being considered. The estimated sales and cost data for each alternative have been tabulated. The MARR is 20 per year. Annual revenues are based on the number of units sold and the selling price. Annual expenses are based on fixed and variable costs. Determine which selection is preferable based on F W. Confirm your selection by separately checking is preferable using PW. A B Cc Investment cost S 30 000 S 60 000 50 000 Est. units sold year 15 000 20 000 18 000 Unit selling price S 3.50 4.40 4.10 Unit variable cost S 1.00 1.40 1.15 Fixed annual expenses S 15 000 S 30 000 S 26 000 Market value 0 S 20 000 15 000 Useful life 10 yrs 10 yrs 10 yrsA company purchases a new filtration system by borrowing the $30,000 purchase price. The loan is to be repaid with 4 equal annual payments at an annual compound rate of 12%. It is anticipated that the system will be used for 9 years and then be sold for $2,000. Annual operating and maintenance expenses are estimated to be $9,000/year. A savings of $15,000/year is realized over the present system. The firm uses a MARR of 15% for its economic analyses. Determine PW, AW and FW.
- An investment of P 250,000 can be made in a project that will produce a uniform annual revenue of P 192,800 for 5 years and then have a salvage value of 10% of the first cost. Operation and maintenance will be P 72,000 per year. Taxes and insurance will be 4% of the first cost per year. The company expects capital to earn 20% before income taxes. Show whether or not the investment is justified economically using1. ROR method2. payout methodA pump for a reservoir must be operated continuously (8,760 hours per year). In the event of a large storm, the electricity from the local utility’s power grid may be interrupted for an indefinite period of time. To deal with this emergency situation, two mutually exclusive backup diesel generators are being investigated. One of them will be chosen for implementation. Relevantdata are provided as follows: If salvage values of both generators are negligible and the study period is 60 years, which generator should be chosen? The MARR is 10% per yearPlease no written by hand solutions A farmer in China is considering three alternative machines. Machine A will cost K18,000. Machine B will cost K16,000, while Machine C will cost K13,800. Machine A will generate a constant net cash income amount of K5000 for 5 years, with a salvage value K6000. Machine B will generate K7,000, K6000, K5,000, K4,000, K3000 from year 1 to 5 respectively with a salvage value of K3000, Machine C is a used machine and will generate net cash flow for 3 years, K6000, K5500, K4000 and will have a salvage value of K4500. All three machines can be depreciated use a straight-line method. Machine A will attract a TSIC of 3000, B will attract a TSIC of K2500 and machine C will attract a TSIC of K2350. Income generated from all machines are subject to a 37.5% tax. (Note: use 5 decimals for the discount factor and 2 decimals for the NPV) a. Assume no debt capital is used, use the NPV method to select the most profitable machine. b. Which one is the second…
- DRAW CASH FLOW DIAGRAM Calculate the capitalized cost of a project that has an initial cost of P8,000,000 and an additional cost of P250,000 at the end of every 8 years. The annual operating costs will be P150,000 at the end of every year for the first 5 years and P200,000 thereafter. In addition there is expected to be recurring major rework cost of P500,000 every 13 years. Assume i=12%Three independent project R, S, & T. If the PW of these projects at MARR is as follows: PWS= $80,000, PWR = -$50,000, PWT = $70,000. Write down the bundles that you can be immediately excluded from the analysis.The company uses a 10% discount rate and the total-cost approach to capital budgeting analysis. The working capital required under the new system would be released for use elsewhere at the conclusion of the project. Both alternatives are expected to have a useful life of ten years.1. The net present value of the overhaul alternative (rounded to the nearest hundred pesos) is: P(750,300) P(987,400) P(725,800) P(975,800) 2. The net present value of the new system alternative (rounded to the nearest hundred pesos) is: P(552,900) P(758,400) P(862,900) P(987,400)
- 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 $4,000A project is estimated to cost P120k, last 8 years & have a salvage value of P20k. The annual gross income is expected to average P50k & annual expenses is P5k. If capital is earning 10% determine if this is a desirable investment using annual cost method, what is the net cost. a). P24,255.598 b). P42,525.598 c). P42,255.598 d). P24,525.598An electric cooperative is considering the use of a concrete electric pole in the expansion of its powerdistribution lines. A concrete pole costs 18,000 each and will last 20 years. The company is presentlyusing creosoted wooden poles which cost 12,000 per pole and will last 10 years. If money is worth 12percent, which pole should be used? Assume annual taxes amount to 1 percent of the first cost and zerosalvage value in both cases. Determine the best alternative using: (i = 12%)a. Annual Cost (AC) Methodb. Equivalent Uniform Annual Cost (EUAC) Methodc. Present Worth Cost (PWC) Method