A water utility is investigating two options for delivering water from a new source. The costs for both options are summarized in the table below. Using Annual Cash Flow Analysis with a MARR of 6% and a 40-year planning horizon, determine the best option.
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- Question 4 Which increment should be examined first in incremental rate of return analysis, if MARR = 9.0%? Do-nothing A First cost Annual benefit Life ROR A-B O A-C O B-C OB-A 0 0 10 yrs $5,500 895 10.0% B C $3,000 $7,000 531 1,164 12.0% 10.5% D $3,000 408 6.0%Would love some help on how to approach this - thanks! The cash flows for three different alternatives are given in table below. MARR =10%. Alt. A Alt. B Alt. C Initial cost $5,000 9,000 7,500 Annual benefits $1,457 2,518 2,133 RoR 14% 13% 12.4% Life in years 5 1. ΔRoR for the first increment (Alt. C-Alt. A) is ___________________. A.10.12% B. 9.38% C. 11.85% D. 11.00% 2. ΔRoR for the second increment is ___________________. A. 10.12% B. 9.38% C. 8.94% D. 9.87% 3. The best alternative for a MARR of 10% using the incremental rate of return analysis is ____________. A. Alt. C B. Alt. A C. Alt. B D. Do nothingA project is being planned that has an initial investment at time 0, annual revenuesand expenses, and a salvage value at the end of the project lifespan (20 years). The financialvalues are summarized below:Initial investment amount at time 0 $150,000Estimated annual revenue $34,500 per yearEstimated annual expenses $8,700 per yearEstimated salvage value at end of lifespan $10,000Minimum attractive rate of return (MARR) 15%a. Calculate the capital recovery amount CR(i%).b. Using the annual worth (AW) method, determine whether purchasing the equipmentis economically justified.c. Repeat part (a) using the internal rate of return (IRR) method based on annual worth(AW).d. Using the present worth (PW) method, determine the break-even time period afterwhich purchase of the equipment generates a profit. (Find N when PW = 0) year period.
- Solve by incremental cashflow then PW = 0. To get the value of i by interpolation. Problem 3: Two plans for a hydroelectric project in Peru have been proposed. The opportunity cost, in soles, of resources is 10 percent. Data on the two alternatives are: System First cost ($/,000,000,000) 300 160 Economic life (years) 40 20 Salvage value ($/,000,000,000) 15 12 Annual benefits (S/.000,000,000) 25 22 Annual costs ($/,000,000,000) 3 1 Using the internal rate of return method, which of the two systems should be chosen or should either be selected?Required information The tabulation of the incremental cash flows between alternatives A and B is shown. Alternative A has a 3-year life and alternative B a 6-year life. Year Incremental Cash Flows (BA), $ -22,500 5,000 5,000 11,000 5,000 5,000 5,000 NOTE: This is a multi-part question. Once an answer is submitted, you will be unable to return to this part. 0123456 If neither alternative has a salvage value, what is the first cost of alternative A? The first cost of alternative A is $-Calisto Launch Services is an independent space corporation and has been contracted to develop and launch one oftwo different satellites. Initial equipment will cost $750,000 for the first satellite and $850,000 for the second.Development will take 5 years at an expected cost of $150,000 per year for the first satellite; $120,000 per year forthe second. The same launch vehicle can be used for either satellite and will cost $275,000 at the time of the launch5 years from now. At the conclusion of the launch, the contracting company will pay Calisto $2,500,000 for eithersatellite.Calisto is also considering whether they should consider launching both satellites. Because Calisto would haveto upgrade its facilities to handle two concurrent projects, the initial costs would rise by $150,000 in addition to thefirst costs of each satellite. Calisto would need to hire additional engineers and workers, raising the yearly costs to atotal of $400,000. An additional compartment would be added to…
- Given cash flows for two alternatives as shown in table below, choose the most attractive alternative if MARR = 8%. Year 0 1 2 3 through ∞ Alt. A -$42K $3.6K $3.6K $3.6K Alt. B -$54K $4.7K $4.7K $4.7K Group of answer choices Alt. A Alt. B Select neither Select eitherMANUAL SOLUTIONS NOT EXCELDOWNVOTE IF EXCELDetermine the difference between the capitalized cost of the timber and steel penstock for a hydroelectric plant with interest of 10%: Timber Steel First Cost Php50,000 Php80,000 Estimated Life 10 years 30 years Scrap Value Php2,000 None Annual Maintenance Php1,200 Php200 Show calculations for the capitalized cost of each item separately.If the interest rate, i=10%, the capitalized cost (CC) of the given project whose Cash Flow diagram is given below is closest to: 0 PO=$800,000 1 2 $200,000 (Nonrecurring) 3 F--- -% per year 4 5 A= $5,000 6 7 8 Year $1025890 O $1030560 $1038450 $1027273 $2027372 O
- Margaret has a project with a $28 000 first cost that returns $5000 per year over its 10-year life. It has a salvage value of $3000 at the end of 10 years. If the MARR is 5 percent, what is the payback period of this project? Ctrl) -A Cost $4000 $2000 $6000 $1000 $9000 Annual benefit 639 410 761 117 750 Useful life, in years 20 20 20 20 20 i* 15% 20% 11.1% 9.9% 5.45% Perform incremental ROR analysis to select best one. MARR=6%; (P/A, 6%, 20) = 11.47 %3DWhich alternatives can be eliminated immediately in the first step of incremental rate of return analysis, if MARR = 10.0%? Do-nothing A B C D First cost 10 $6,000 $4,500 $9,500 $9,500 Annual 0 998 829 1,716 1,384 benefit Life 10 yrs ROR 10.5% 13.0% 12.5% 7.5% D only not enough information попе D and C