What is the Present worth difference of Alternative A and B. Capital investment Annual Cash inflow Life in years Salvage value Interest is 10% per year O a. 1452 O b. 1234 O c. 998 O d. 1106 Alternative A 3500 1255 4 0 B 5000 1480 6 0
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- An investor will invest $1,000 now and expect to receive $10 for each of the next 10 years plus $1,000 at the end of the 10th year. Her cash flow at time period 0 is Select one: a. $-990 b. $1,010 c. $1,000 d. -$1,000Two lathes are being considered in the manufacture of certain machine parts. Data is given below, all cost in peso: LATHE A LATHE B First Cost 40,000 56,000 Salvage Value 5,000 7,000 Annual Maintenance 2,000 2,800 Operation, Cost/hour 4 3.5 Life, in years 10 12 Time per part (hours) 0.40 0.25 REQUIRED: Determine the number of machine parts/year that could be produced so that 2 lathes will be equally economical if the MARR is 18%. Use AWM If the number of parts is 10,000 units, which lathe will you recommend? Use ROR If the number of parts is 10,000 units, which lathe will you recommend? Use PWM If the number of parts is 10,000 units, which lathe will you recommend? Use EUACA project your firm is considering for implementation has these estimated costs and revenues: an investment cost of $56417, a maintenance costs that start at $5,000 at end of year (FOY) one and increase by $1,000 for esch of the next four years, and then remain constant for the following five years; savings of $24851 per year (EOY 1-10); and finally a resale value of $31935 at EOY 10 If the project has a 10 year life and the firm's MARR is 10% per yeat, what is the present worth of the project?.
- An oil company is planning to install a new 80 mm pipeline to connect storagetanks to a processing plant 1500 m away. The connection will be needed for theforeseeable future. Refer to their costs incurred below:initial cost: RM15,000service life: 12 yearssalvage value: RM200one-off saving in year 8: RM 300annual profit: RM400annual pump operation hours: 450 hourspump cost per hours: RM2.50Calculate the single project evaluation using Benefit Cost Ratio PW analysismethod, which is preferred if the MARR is 7%. Draw the cashflow diagram.Methods of Economy Studies 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. Present Worth (PW) method2. Future Worth (FW) method3. Annual Worth (AW) method4. Rate of Return (ROR) method5. Payback (Payout) methodThe product development group of a high-tech electronics company developed five proposals for new products. The company wants to expand its product offerings, so it will undertake all projects that are economically attractive at the company’s MARR of 20% per year. The cash flows (in $1000 units) associated with each project are estimated. Which projects, if any, should the company accept on the basis of a present worth analysis? Project A B C D E Initial investment, $ −400 −510 −660 −820 −900 Operating cost, $/year −100 −140 −280 −315 −450 Revenue, $/year 360 235 400 605 790 Salvage value, $ — 22 — 80 95 Life, years 3 10 5 8 4
- P = 10000S = 1000Annual Savings = 4000Annual Maintenance Cost = 3000i = 5%,n = 7 years Which formula below will correctly calculate NPW? -10000 (P/A, 5%, 7) + 1000 (P/F, 5%, 7) + 4000 (P/A, 5%, 7) - 3000 (P/A, 5%, 7) -10000 (A/P, 5%, 7) + 1000 (A/F, 5%, 7) + 4000 - 3000 None of the above -10000 + 1000 + 4000 - 3000 -10000 (A/P, 5%, 7) + 1000 (A/F, 5%, 7) + 4000 + 3000Engineering economy - ENGR 3322 The International Parcel Service has installed a new radio frequency identification system to help reduce the number of packages that are incorrectly delivered. The capital investment in the system is $65,000, and the projected annual savings are tabled below. The system’s market value at the EOY five is negligible, and the MARR is 18% per year. Calculate the present worth of the project. a. $ 35,730 b. $ 36,730 c. $ 37,730 d. None of the choicesA salesman offers a businessman two options for certain machine. Using the Present Value (PV) Method in determining the more economical, what is the Present Value of Option A? Assume interest is 24% cpd. a. Option A: First Cost – P203,692; Annual operating cost – P93,768; Salvage Value – P15,969; and Useful life – 4 years Option B: First Cost – P65,000; Annual operating cost – P20,000; Salvage Value – P2,500; and Useful life – 6 years
- a young engineer wishes to become a millionaire by the time he is 60 years old. He belives that by careful investment he can obtain a 15% rate of return. He plans to add a uniform sume of money to his investment program each year, beginning on his 20th birthday and continuing through his 59th birthday. How much money must the enigneer set aside in this project each 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.A project is being considered that has a first cost of $12,500, creates $5000 in annual cost savings, requires $3000 in annual operating costs, and has a salvage value of $2000 after a project life of 3 years. If interest is 10% per year, which formula calculates the project’s present worth? (a) PW = 12,500(P/F, 10%, 1) + (− 5000 + 3000) (P/A, 10%, 3) − 2000(F/P, 10%, 3) (b) PW = − 12,500 + (5000 − 3000) (P/A, 10%, 3 ) − 2000(P/F, 10%, 3) (c) PW = 12,500(F/P, 10%, 3) + (5000 − 3000) (F/A, 10%, 3) + 2000 (d) PW = − 12, 500 + 5000(P/A, 10%, 3) − 3000 (P/A, 10%, 3) + 2000(P/F, 10%, 3)BASED ON ESTIMATES THE DATA FOR TWO TYPES OF BRIDGES WITH DIFFERENT LIVES ARE AS FOLLOWS. IFTHE MINIMUM RATE OF RETURN IS 9%, DETERMINE W/C PROJECT IS MORE DESIRABLE. TIMBER BRIDGE STEEL BRIDGEFIRST COST P 50,000.00 P 140,000.00SALVAGE VALUE 2,000.00 10,000.00LIFE IN YEARS 12 36ANNUAL MAINTENANCE 6,000.00 2,500.00EVALUATE USING:A.) THE ANNUAL COST METHODB.) PRESENT WORTH COST METHODC.) RATE OF RETURN METHOD