The alternatives shown are to be compared on the basis of their present worth values. At an interest rateof 10% per year, the values of n that you should use in the uniform series factors to make a correctcomparison by the present worth method are:(a) n = 3 years for A andn = 3 years for B(b) n = 3 years for A andn = 6 years for B(c) n = 6 years for A andn = 6 years for B(d) None of the aboveAlternative A Alternative BFirst cost, $-50,000-90,000- 10,000Annual operating cost,$ per yearSalvage value, $Life, years-400013,00015,0003abCd.

The present worth analysis is one of the analyses which helps in finding out the economic viability…

Answered: The alternatives shown are to be…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The initial cost of a packed-bed degassing reactor for removing trihalomethanes from potable water is $84,000. The annual operating cost for power, site maintenance, etc. is $13,000. If the salvage value of the pumps, blowers, and control systems is expected to be $9000 at the end of 10 years, the AW of the packed-bed reactor, at an interest rate of 8% per year, is closest to: (a) $−26,140 (b) $−25,518 (c) $−24,900 (d) $−13,140
U.S. Steel is considering a plant expansion to produce austenitic, precipitation hardened, duplex, and martensitic stainless steel round bars that is expected to cost $13 million now and another $10 million 1 year from now. If total operating costs will be $1.5 million per year starting 1 year from now, and the estimated salvage value of the plant is virtually zero, how much must the company make annually in years 1 through 12 to recover its investment plus a return of 22% per year?
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The annual worth for years 1 through infinity of $50,000 now, $10,000 per year in years 1 through 15, and $20,000 per year in years 16 through infinity at 10% per year is closest to
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Q13. A small construction company has $190,000 set aside in a capital improvement fund to purchase new equipment. If $18,000 is invested at 16%, $34,000 at 21%, and the remaining $138,000 at 19% per year, what is the overall rate of return on the entire $190,000? The overall rate of return on the entire $190,000 is % per year.
Lego Group in Bellund, Denmark, manufactures Lego toy construction blocks. The company is considering two methods for producing special-purpose Lego parts. Method 1 will have an initial cost of $460,000, an annual operating cost of $100,000, and a life of 3 years. Method 2 will have an initial cost of $560,000, an operating cost of $90,000 per year, and a 6-year life. Assume 11% salvage values for both methods. Lego uses an MARR of 9% per year. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
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An engineer has been offered an investment opportunity that will require a cash outlay of $40,000 now for a cash inflow of $3500 for each year of investment. However, she must state now the number of years she plans to retain the investment. Additionally, if the investment is retained for 6 years, a lump-sum amount of $36,000 will be returned to her; after 10 years, the lump-sum return is anticipated to be $49,000, and after 15 years, it is estimated to be $55,000. Money is currently worth 10% per year. (a) Is the decision sensitive to the retention period? If so, what investment period is best? (b) Write the format of the spreadsheet function that will display the correct PW values.
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An engineer has been offered an investment opportunity that will require an immediate cash outlay of $40,000 for a cash inflow of $3500 for each year of investment. However, she must state now the number of years she plans to retain the investment. Additionally, if the investment is retained for 6 years, a lump-sum amount of $36,000 will be returned to her; after 10 years, the lump sum return is anticipated to be $50,500, and after 15 years, it is estimated to be $52.000. Money is currently worth 9% per year. Determine the present worth values for 6 years, 10 years, and 15 years, and decide if the decision is sensitive to the retention period? The present worth when the investment is retained for 6 years is $___________ The present worth when the investment is retained for 10 years is $____________ The present worth when the Investment is retained for 15 years is $_____________

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