For the following table, if the MARR is 10% per year and a useful life for each alternative of six years that equals the study period. The rank order of alternatives from least capital investment to greatest capital investment is Do nothing C Fill the table with the missing values. Do nothing ? (2) ? (4) A capital investment A annual revenues -15,000 -2000 -3000 4,000 900 460 A annual costs A market value A IRR Alternative chosen -1,000 6,000 -150 -100 -2,220 3,350 ? (5) (6) 12.7% 10.9% (1) (3)
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- Complete the following analysis of cost alternatives and select the preferred alternative. The s A D Сapital investment $15,000 S16,000 $13,000 $18,000 Annual costs Market value 250 300 500 100 1,000 1,300 1,750 2,000 at EOY 10 FW(12%) -$49,975 –$53,658 ??? –$55,660 tudy period is 10 years and the MARR = 12% per %3D year.Given the following pertinent data for four alternatives, what is the best alternative using the incremental ROR method given MARR=10% Initial Cost Annual CF, $ Life, years 30 O Alt. A Alt. B O Alt. C A O Alt. D B +22,000 +35,000 с -200,000 -275,000 -190,000 -331,350 30 D +19500 +42,000 30 30What is the best alternative using incremental Analysis? Use MARR = 15% A B C Capital Investment $ 2,000 7,000 4,200 Annual Revenues 3,200 8,000 6,000 Аппиal Costs 2, 100 5, 100 4,000 Market Value at the end of useful life 100 600 420 Useful Life (in years) 10 10 10 The correct ranking of Alternative is Blank 1 Select Alternative Blank 2 Note: Do not put comma, unit of measure and limit your answer to two decimal places. Ex: A-B-C
- The following four alternative investments are being compared at MARR of 12%. Which investment is the most economical over the entire service life? Alt. L Alt. W 10 10 $590,000 $645,000 Alt. D 10 $495,000 14.2% 9 13.4% 15% 6 5 Service life (years) Net PW IRR Disc payback period (yrs) Alt. X 10 $533,000 16.2% 8 OA. Alternative D because it has the longest payback period OB. Alternative W because it has the highest net PW OO C. Alternative L because it has the shortest payback period OD. Alternative X because it has the highest IRRAn electronics firm is planning to manufacture a new handheld gaming device for the preteen market. The data have been estimated for the product. Assuming a negligible market (salvage) value for the equipment at the end of five years, determine the breakeven annual sales volume for this product.On the extra investment of the Mutually exclusive Independent Specified study period Do nothing alternative 5. higher initial cost alternative Future worth Every other alternative Incremental ROR Over one life cycle of each alternative Leest common 10 multiple of their analysis lives Motch eoch of the options above to the items below. When only one alternative is to be selected from multiple alternatives, the alternatives are said to be In evaluating multiple independent alternatives, each elternative is compared against the. In evaluating mutually exclusive alternatives on the basis of rate of return, it is necessary to conduct a (an). obtain the same ranking as the PW and AW methods. in order to A tabulation of incremental cash flow between two different-life alternatives must be prepared over the The rate of return calculated from an incremental analysis represents the rate of return obtainable
- Brand A B 5:21 PM C D 2 years 3 years $13 4 years $17 5 years Which brand should the engineer select if the MARR is 9% a year? Cost m October 7, 2023 17:17 $7 2. An electrical engineer has to choose one brand of light bulbs among four available brands. The following information are available; lifetime $9 VPN G 4G+ LTE 22 8 0A 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.The cash flows for three mutually exclusive alternatives are given in table below. MARR = 4%. ALB Alt. C 27,000 24,000 7,600 6,500 13% 11% Initial cost Annual benefits ROR Life in years Alt. A $15,000 $4,500 15% 5 Reference: Case Study 8 The best alternative for a MARR of 2.0% using the incremental rate of return analysis is A. Alt. C B. Alt. B C. Alt. A OD.Do-nothing
- Q15. For the cash flows shown, determine the incremental cash flow between machines B and A (a) in year 0, (b) in year 3, and (c) in year 6. Machine First Cost, $ A B -13,000 -25,000 AOC, $ per Year -1,300-400 Life, Years Salvage Value, $ 5,000 6,000 3 6 a) The incremental cash flow between machines B and A in year 0 is $ . b) The incremental cash flow between machines B and A in year 3 is $. c) The incremental cash flow between machines B and A in year 6 is $ .-Two alternatives are shown in the table below. If the MARR is 20%, which alte mative should be selected and why? Remember to show your work!) (Estimated Rasponse Times for Awarage Student: 7 minutes) Year C C Altemative A $3.000) $1,200 $1,300 $1,300 Alemative B $1.500 $1.500 $1,500 a. Choose Altemative B because the incremental rate of retum is 18.22%, which is less than the MARR, therefore the more expensive aftemative should be selected b. Choose Altemative B because it has an IRR of 11.25% where as Alternative A only has an IRR of 9.70% c. Choose Altemative A because the incremental rate of retum is 1.54%, which is less than the MARR, therefore the cheaper alternative should be selected d. Choose Altemative A because the incremental rate of retum is 18.22%, which is less than the MARR, therefore the cheaper altemative should be selected e. Choose Altemative B because the incremental rate of retum is 1.54%, which is less than the MARR, therefore the more expensive altemative should…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 nothing