Select between the two options using the corporate MARR of 15% per year and a future worth analysis for the expected use period.OptionFirst CostAOC, per YearExpected Market ValueExpected UseE$-54,000$-12,000$5,000З years$-64,000$-14,000$6,0006 yearsThe future worth of option D is $The future worth of option E is $Option (Click to select) vis sefected.(Click to select)DE

In the future worth method, we convert all cash flows into the future period and compare the future…

Select between the two options using the corporate MARR of 15% per year and a future worth analysis for the expected use period. Option First Cost AOC, per Year Expected Market Value Expected Use $-54,000 $-12,000 $5,000 З years $-64,000 $-14,000 $6,000 6 years The future worth of option D is $ [ The future worth of option E is $ [ Option (Click to select) ♥ Eis selected. (Click to select) E

Select between the two options using the corporate MARR of 15% per year and a future worth analysis for the expected use period. Option First Cost AOC, per Year Expected Market Value Expected Use $-54,000 $-12,000 $5,000 З years $-64,000 $-14,000 $6,000 6 years The future worth of option D is $ [ The future worth of option E is $ [ Option (Click to select) ♥ Eis selected. (Click to select) E

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

Projects A and B have first costs of $6,500 and $17,000, respectively. Project A has net annualbenefits of $2,000 during each year of its 5-year useful life, after which it can be replacedidentically.Project B has net annual benefits of $3,000 during each year of its 10-year life. Use present worthanalysis, and an interest rate of 10% to determine which project to select.
Samsung Electronics is trying to reduce supply chain risk by makingmore responsible make/buy decisions through improved cost estimation. A high-usecomponent (expected usage is 5000 units per year) can be purchased for $25 perunit with delivery promised within a week. Alternatively, Samsung can make thecomponent inhouse and have it readily available at a cost of $5 per unit, ifequipment costing $150,000 is purchased. Labor and other operating costs areestimated to be $35,000 per year over the study period of 5 years. Salvage isestimated at 10% of first cost and MARR is 12% per year. Neglect the element ofavailability (a) to determine the breakeven quantity, and (b) to recommend makingor buying at the expected usage level.
Two insulation thickness alternatives have been proposed for a process steam line subject to severe weather conditions. One alternative must be selected. Estimated savings in heat loss and installation cost are given below. Which thickness would you recommend for a MARR=12%per year and negligible market (salvage) values? The study period is 4 years. Use the imputed market value technique to estimate the market value of the 5 cm alternative after four years. Thickness Installed Cost Annual Savings Life 2 cm $23,000 $4,900 4 years 5 cm $40,000 $7,500 6 years The AW of 2 cm insulation is $ nothing. The AW of 5 cm insulation is $nothing. Which thickness would you recommend? Choose the correct answer below. 5 cm 2 cm
A new manufacturing plant costs $530,000 to build. O&M are estimated to be $50,000 per year, and a salvage value of 25 percent of the initial cost is expected. The units the plant produces are sold for $60 each. Sales and production are designed to run 365 days per year. The planning horizon is 10 years. MARR is 10%. Determine the number of units that must be sold annually to achieve breakeven.
A potential project is currently under review. An initial investment of 87000 would be necessary for equipment. The annual revenues and expenses are expected to be 40000 and 19000 each year, respectively, over the 6-year project period. The salvage value of the equipment at the end of the project period is projected to be $17000. Assume a MARR of 9%. Find the PW (to the nearest cent).
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 $4,000
once comparison between two alternatives using payback period criterion, we choose the one whose payback period is larger. Select one: True False
ABC Beverage, LLC, purchases its 355-ml cans in large bulk from Wald-China Can Corporation. The finish on the anodized aluminum surface is produced by mechanical finishing technologies called brushing or bead blasting. Engineers at Wald are switching to more efficient, faster, and cheaper machines to supply ABC. Use the estimates and MARR = 8% per year to select between the two alternatives. Brush Alternative Bead Blasting Alternative P $-400,000 $-400,000 n 6 years large Salvage Value $50,000 no value AOC Nonlabor $-60,000 in year 1, decreasing by $2500 annually starting in year 2 $-70,000 per year
A project capitalized for P5,000,000 is expected to earn a uniform annual revenue of P1,000,000 in 10 years. The cost of operation and maintenance is P100,000 a year, taxes and insurance will cost 3% of the first cost per year. If the company expects its capital to earn 12% income before taxes, would you recommend investing in the project? Use the PW method. Determine the present worth of income.Determine the present worth of cost.Will it be worthwhile to invest for the apartment?
The most possible values of an investment project are as follows: First cost, $ 300,000 Annual operating cost, $ 10,000 Annual benefit, $ 120,000 Salvage value, $ 80,000 Life, year 30 MARR per year 15% The most uncertain parameters are annual operating cost and annual benefit. Perform a multiparameter sensitivity analysis and write your conclusions
Two laser machines (A & B) used in a project and are being compared to choose one of them, for a medical center specialized in eye's treatments. The price of machine A is 1,200,000 Usdand requires an annual maintenance of 100,000 Usd, while the price of machine B is 1,000,000Dhs and requires an annual maintenance of 120,000 Usd. The expected life time for bothmachines is 8 years after which the two machines salvage values will be 150,000 Usd formachine A and 125,000 Usd for machine B. The MARR decided by the medical centeradministration is 9% per year. So tell the future calculated worth analysis to decide whuch a or b will be good to be purchased?
Q. Capitalized costs(CC) are used for: Select one: O a. projects with salvage values considered. O b. projects that P/F factors less than 1.0. O c. alternatives with low and high first cost. O d. projects with very long expected lives or long planning horizons. Q. The annual worth method offers a prime computational and interpretation advantage because the AW value needs to be calculated for only one life cycle. The AW välue determined over one life cycle is the AW for all future life cycles. Therefore. It is necessary to use the LCM of lives to satisfy the equal-service requirement. Select one: O.a. False O.b. True