STMN 7) The alternatives are mutually exclusive and the MARR is 10% per year. The annu worth (AW) of alternative X & Y is closest to First Cost, $ Annual Income, S/year Annual Operating Cost, S/year Maintenance Cost every years, S Life, years a. 45.75 & -29.50 b.-35.96 & 29.50 c. 35.96 & -36.87 d. 45.75 & 36.87 e. 35.96 & 29.50 -200 120 -50 -25 10 Y -550 110 -20 -50 S

STMN 7) The alternatives are mutually exclusive and the MARR is 10% per year. The annu worth (AW) of alternative X & Y is closest to First Cost, $ Annual Income, S/year Annual Operating Cost, S/year Maintenance Cost every years, S Life, years a. 45.75 & -29.50 b.-35.96 & 29.50 c. 35.96 & -36.87 d. 45.75 & 36.87 e. 35.96 & 29.50 -200 120 -50 -25 10 Y -550 110 -20 -50 S

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which alternative in the table below should be selected when the MRR = 6% per year? The life of each Kalternative is 10 years. Increment Considered A Investment cost A (Annual Revenues less. Costs) IRR on A Investment Cost A(A-DN) $800 $154 14.1% The IRR on A(C-B) is %. (Round to one decimal place.) A(B-A) $700 $114 10.0% A(C-B) $1,100 $170 ? A(D-C) $1,300 $130 2
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Advanced Technologies, Inc. is evaluating two alternatives to produce its new plastic filament with tribological (low friction) properties for creating custom bearing for 3-D printers. The estimates associated with its alternatives are shown below. Use LCM way and a MARR of 20% per year. Method DDM LS First Cost $ -165,000 -375,000 M&O cost, $/year -50,000 -25,000 Salvage value $ 30,000 Life, years 2 4 Which Method should be selected? O a. Select Method DDM since it generates higher revenue. b. Select Method LS since it generates higher revenue. c. Select Method DDM since it is less costly. O d. Select Method LS since it is less costly.
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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 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
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A company that manufactures magnetic membrane switches is investigating two production options that have the estimated cash flows shown ($1 million units) in Table below. Which one should be selected on the basis of Present Worth (PW) analysis at 10% per year? In-house Contract First cost, $ Annual cost, $ Annual income, $ per year Salvage value, $ Life, years -30 per year -5 -2 14 3.1 10% TABLE 15 Discrete Cash Flow: Compound Interest Factors 10% Single Payments Uniform Series Payments Arithmetic Gradients Compound Present Worth Sinking Fund Compound Capital Recovery A/P Present Gradient Gradient Amount Amount Worth Present Worth Uniform Series F/P P/F A/F F/A P/A P/G A/G 1 1.1000 0.9091 1.00000 1.0000 1.10000 0.9091 1.2100 0.8264 0.47619 2.1000 0.57619 1.7355 0.8264 0.4762 3 1.3310 0.7513 0.30211 3.3100 0.40211 2.4869 2.3291 0.9366 4 1.4641 0.6830 0.21547 4.6410 0.31547 3.1699 4.3781 1.3812 0.6209 0.5645 0.5132 1.6105 0.16380 6.1051 0.26380 3.7908 6.8618 1.8101 6 1.7716 0.12961…
An investment of P270,000 can be made in a project that will produce a uniform annual revenue of P185,400 for 5 years and then have a salvage value of 10% of the investment. Out-of-pocket cost for operation andmaintenance will be P81,000 per year. Taxes and insurance will be 4% of the first cost per year. The company expects capital to earn not less than 25% before income taxes. (a) Future Worth Method(b) Present Worth Method What is the future worth of net cash flows
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