2. Three mutually exclusive earth-moving pieces of equipment are being considered for several large building projects in India over the next five years. The estimated cash flows for each alternative are given below. The construction company's MARR is 15% per year. Which of the three alternatives, if any, should be adopted? State your main assumptions. Capital investment Net annual revenue Salvage value Useful life Caterpillar $22,000 $7,000 Deere $26,200 $9,500 Case $17,000 $5,200 $4,000 $5,000 $3,500 4 years 3 years 5 years
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- 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-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.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
- 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 $ .Any help would be appreciated! Given the data for three different alternatives in the table below, determine the best alternative using the incremental rate of return (∆RoR) analysis. MARR =9%. A B C First cost $15,000 $25,000 $20,000 O &M Cost/ year 1,600 400 900 Benefit/year 8,000 13,000 9,000 Salvage value 3,000 6,000 4,600 Life in years 4 4 4 1. The better alternative between the first increment is ________________. A. Alt. A or Alt. B B. Alt. A C. Alt.C D. Alt. B 2. The better alternative between the second increment is ___________________. A. Alt. B or Alt. C B. Alt. B C. Alt. C D. Alt. A:[A] { > Incremental analysis ([ B Alternative], [B wins ]): C A company considering 2 different machines at MARR at 12% Both life spans = 10 years Initial Cost Annual Operating lost Benefits per yin ar Salvage Value \table MM If you are and of frying investment to company decide More than 2 alternatives if the additional increment is worth while, compare Alternative: A Incremental analysis (Alternative) pairs then B C A MARR Company at Considering 2 different machines at 12% Both life spans = 10 years. M/C X м/с у Initial Cost 160000 285000 Annual Operating Cost Benefits per year Salvage Value 45 000 90000 45000 105000 20000 40000
- Analyze a CSR capital investment proposal for Ganon Inc. Ganon Inc. is evaluating a proposal to replace its HID (high intensity discharge) lighting with LED (light emitting diode) lighting throughout its warehouse. LED lighting consumes less power and lasts longer than HID lighting for similar performance. The following information was developed: Line Item Description Value HID watt hour consumption per fixture 500 watts per hr. LED watt hour consumption per fixture 300 watts per hr. Number of fixtures 800 Lifetime investment cost (in present value terms) to replace each HID fixture with LED $300 Operating hours per day 10 Operating days per year 300 Metered utility rate per kilowatt-hour (kwh)* $0.12 *Note: A kilowatt-hour is equal to 1,000 watts per hour. a. Determine the investment cost for replacing the 800 fixtures.fill in the blank 1 of 1$ b. Determine the annual utility cost savings from employing the new energy solution.fill in the blank 1 of 1$ c. Should…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 OFor 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 Fill the table with the missing values. > A C в Do nothing > A ? (2) ? (4) A capital investment A annual revenues A annual costs A market value A IRR -15,000 -2000 -3000 4,000 900 460 -150 -1,000 6,000 -100 -2,220 3,350 ? (5) (6) 12.7% 10.9% Alternative chosen (1) (3) 1. write the alternative chosen 2. write the two alternatives compared 3. write the alternative chosen 4. write the two alternatives compared 5. what is IRR incremental (final answer) 6. write the alternative chosen
- The five mutually exclusive alternatives shown below are under consideration for improving visitor safety and access to additional areas of a national park. If all alternatives are considered to last indefinitely, determine which should be selected on the basis of a rate of return analysis using an interest rate of 10%. A B C D E_ First cost, $ millions -20 -40 -35 -90 -70 Annual M&O cost, $ millions -2 -1.5 -1.9 -1.1 -1.3 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.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%MANUAL 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.