Decision D6, which has three possible choices (X, Y, or Z), must be made in year 3 of a 6-year study period in order to maximize EPW).Using an MARR of 18% per year, the investment required in year 3, and the estimated cash flows for years 4 through 6,determine which decision should be made in year 3.HighLowHigh06Low2HighLowInvestment, Cash Flow, (YearCash Flow, $1000Cash Flow,Year 313)(Year 4)$1000 (Year 5)Cash Flow, $1000(Year 6)OutcomeProbability3456High (X)$-150,000$50$50$500.5Low (X)$40$30$200.5High (Y)$-73,000$30$40$500.45Low (Y)$30$30$300.55High (Z)$-240,000$190$170$1500.7Low (Z)$-30$-30$-300.3The present worth of X is $

Given Data: YearHigh (X)Low (X)3 (1,50,000)450000400005500003000065000020000Outcome…

Answered: Investment, Cash Flow, (Year Cash Flow,…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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incremental rate of return analysis MARR = 20% %3| 1st 0=-8000 + 12.886,63(P/A,i*,15) + 533,33(P/Fi",15) I*= ? 2nd 0=-2800 + 864,87(P/A,i",15) + 186,67(P/F,i*,15) 1*= ? 3rd 0=-2960 + 1297,32(P/A,i*,15) + 197,33(P/F,i*,15) |*= ? wie 4th 0=-1040 + 2767,6(P/A,i*,15) + 69,33(P/E.i*,15) I*2 0=-2000 + 2508,13(P/A.i*,15)+ 133,34(P/E.i*,15) I*= ?
Peter got a 8-year assignment in Argentina. Consequently, he will rent out his three-bedroom house in Hancock to an old friend, and given their friendship, Peter only requires end of the year payments (thus no monthly pmts) to be deposited in a savings account created solely for this purpose. Rental income will be 13,709 dollars per year but maintenance/repair costs will be 503 dollars in the first year and thereafter increase by 213 dollars per year. The tenant will be doing the maintenance/repair operations and therefore, at the end of each year, deposits the annual rent amount net of maintenance costs. Compute how much money will Peter have in his savings account upon his return (8 years from now) given that the proxy interest rate is 7% per year, compounded annually. (note: round your answer to the nearest cent, and do not include spaces, currency signs, plus or minus signs, or commas)
You are planning to make 18 monthly withdrawals beginning at the end of the sixth month. You plan to withdraw $113 in the sixth month and increase your withdrawals by $17 over the previous month’s withdrawal. How much should you deposit now in a bank account that pays 12% per year compounded monthly? Hint: Determine m and k and use the decision tree to find how you must setup the cash flow equation. Remember to bring all the cash flows to the proper time period required to answer this question.
An integrated, combined cycle power plant produces 285 MW of electricity by gasifying coal. The capital investment for the plant is $570 million, spread evenly over two years. The operating life of the plant is expected to be 20 years. Additionally, the plant will operate at full capacity 75% of the time (downtime is 25% of any given year). The MARR is 6% per year Cash flow diagram only Thank you No need calculation. Please help
The rate of return for the following cash flow is closest to: If the file failed to load, click https://www.dropbox.com/s/nuxqnt15nak2kdc/ROR-FE1.jpg If you decided to use Excel to solve this problem, be aware that you will need to solve in by hand in Exam 2. Year 0 Cash Flow - $15,000 1 0 2 $2,500 3 $5,000 4 $7,500 5 $10,000 10% 12% 14% 16%
The American Pharmaceutical Company (APC) has a policy that all capital investments must have a three-year or less discounted payback period in order to be considered for funding. The MARR at APC is 7% per year. Is the above project able to meet this benchmark for funding? Click the icon to view the interest and annuity table for discrete compounding when the MARR is 70er year. The payback period is years. (Round to the nearest whole number.) End of Year 1 2 3 4 5 6-8 Cash Flow - $275,000 - $25,000 $50,000 $180,000 $235,000 $330,000 $95,000
or cash flows. nd annuity table for discrete compounding More Info million. (Round to two decimal places.) e investment economically justified. 1 EOY 6. Print Done ver box.
You have received the proposal to invest $1,000,000 in exchange for receiving income of $75,000 at the end of the first month that would decrease 0.3% each month starting from the 2nd month. Expenses are estimated at $25,000 at each end of the month, starting from the 1st month. Assume that the proposal will last 5 years and that the minimum acceptable rate of return (m) is 1.5% per month. What does the Present Value criterion recommend? Show your work. If flow patterns are found (uniform, arithmetic, exponential), use factors.
Abby purchased 100 shares of her father’s favorite stock for $27 per share exactly 1 year ago, commission free. She sold it today for a total amount of $3200. She plans to invest the entire amount in a different corporation’s stock today, but she must now pay a $30 commission fee. If she plans to sell this new stock exactly 1 year from now and realize the same return as she has just made, what must be the total amount she receives next year? Include the commission fee as a part of the purchase price, but neglect any tax effects. The total amount that she receives next year is $____.
The cost of a biomedical image scanning machine is 95000 with an estimated annual maintenance cost of $4500 and an overhauling cost of 3000 in year 6. The machine is projected to save $25000 in direct labor cost annually. Biomedical Analytics Inc. the company who purchased the machine plans to sell it 10 years from now at a price of $35000. a) Draw the cash flow diagram b) Determine the Rate of Return (ROR) if staring with two initial guesses of 18% and 20% Hints: Profit= R-TC Profit = rQ-(FC+ v Q = Annual Quantity
Determine the following for the quarterly cash flow estimates. (a) i* value or values; (b) if an MARR of 5% per quarter is achievable; and (c) the minimum revenue in quarter 8 that will generate an i* that meets the MARR. Quarter Expenses, $ Revenues, $ 0 −20 0 1 −20 5 2 −10 10 3 −10 25 4 −10 26 5 −10 20 6 −15 17 7 −12 15 8 −15 2
8 1 01:59:49 ! Required information You just deposited $9,500 in an investment account and will deposit $5000 more four years from now. Use tabulated factor values to determine how much will be in the account 14 years from now if the rate of return is 10% per year? 14 years from now, the account will have $

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