The estimated negative cash flows for three design alternatives are shown below. The MARR is 13% per year and the study period is four years. Which alternative is best based on the IRR method? Doing nothing is not an option. Capital investment Annual expenses ΕΟΥ 0 A. Alternative B B. Alternative A C. Alternative C 1-4 A $82,400 6,200 Alternative B $64,500 12,100 C $71,900 9,550 Which alternative would you choose as a base one? Choose the correct answer below.
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- Calculate the conventional benefit-cost ratio for the alternative: Initial Investment 250000 Revenues 80000 Costs 22000 Salvage Value 50000 Useful life 9 MARR 0.1.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?Two machines are being considered for purchase. If the MARR (for this problem, also the minimum required interest rate) is 10%, which machine should be bought?
- 4. Incremental ROR and B/C methods require the LCM of the two alternatives being compared. Select one: True FalseA 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.If the capital budget limit is $120,000, the MARR is 10% per year, and all projects have a 10-year life, rank and select from the independent projects using the (a) PI measure, (b) IROR measure, and (c) PW at the MARR. (d) Are different projects selected using the three methods? First Net Income, IROR, PW at Project Cost, $ $ per Year % 10%, $ A −18,000 4,000 18.0 6,578 B −15,000 2,800 13.3 2,205 C −35,000 12,600 34.1 42,422 D −60,000 13,000 17.3 19,879 E −50,000 8,000 9.6 −843
- Determine the FW of the following engineering project when the MARR is 15% per year. Is the project acceptable? (5.4) *A negative market value means that there is a net cost to dispose of an asset. Investment cost Expected lifeMarket (salvage) value* Annual receiptsAnnual expenses $10,000 5 years -$1,000 $8,000 $4,000You are faced with a decision on an investment proposal. Specifically, the estimated additional income from the investment is $125,000 per year; the investment cost is $400,000; and the first year estimated expense of $20,000 and will increase a rate of 5% per year. Assume an 8-year analysis period, no salvage value, and MARR = 15% per year. a. Calculate the PW and FW of this proposal? b. What is the ERR ( Ԑ=MARR) of this proposal? c. What is the Simple and Discounted payback? include the cash flow diagram and conclusionYou are faced with a decision on an investment proposal. Specifically, the estimated additional income from the investment is $125,000 per year; the investment cost is $400,000; and the first year estimated expense of $20,000 and will increase a rate of 5% per year. Assume an 8-year analysis period, no salvage value, and MARR = 15% per year. a. Calculate the PW and FW of this proposal? b. What is the ERR ( Ԑ=MARR) of this proposal? c. What is the Simple and Discounted payback? (Upload the picture of your complete solutions including the correct cash flow diagram and your conclusion.)
- 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 methodThe Logan Well Services Group is considering two sites for storage and recovery of reclaimed water. The mountain site (MS) will use injection wells that cost $4.2 million to develop and $280,000 per year for M&O. This site will be able to accommodate 150 million gallons per year. The valley site (VS) will involve recharge basins that cost $11 million to construct and $400,000 per year to operate and maintain. At this site, 720 million gallons can be injected each year. If the value of the injected water is $3.00 per thousand gallons, which alternative, if either, should be selected according to the B/C ratio method? Use an interest rate of 8% per year and a 20-year study period. The B/C ratio is . Select alternative (Click to select) neither of the alternatives mountain site valley site .Solve the Engineering Economics Problem: Project Feasibility Indicator Which alternative should be selected based on BCR? Assume i=7% and a study period of 10 years. Sensor A: First cost: Php 87,000 Annual M&O: Php 64,000 Annual Benefits: Php 160,000 Annual Disbenefits: --- Sensor B First cost: Php 38,000 Annual M&O: Php 49,000 Annual Benefits: Php 110,000 Annual Disbenefits: Php 26,000