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 Group of answer choices Cannot determine Alterative A Alterative B Alterative C

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 Group of answer choices Cannot determine Alterative A Alterative B Alterative C

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

The survey firm of Layer, Anderson, and Pope (MAP) LLP is considering the purchase of a pieceof new GPS equipment. Data concerning the alternative under consideration are presented below.First Cost $28,000Annual Income 7,000Annual Costs 2,500Recalibration at end of Year 4 4,000Salvage Value 2,800If the equipment has a life of eight years and MAP’s minimum attractive rate of return (MARR) is5%, what is the annual worth of the equipment?
Using Incremental with EUAW analysis find the best alternative, MARR = %10. should use Excel and show your equations seperately, see below example: [A Benefit - [IC (A/P, i%, n) - Salvage (A/F, i, n)] + A Cost+ G Cost (A/G, i, n)] Data B C A First Cost $2,300,000 $2,780,000 $2,540,000 Salvage Value $82,000 $118,000 $97,000 Annual Benefit $580,000 $670,000 $650,000 M&O $65,000 $78,000 $71,000 M&O Gradient $11,000 $15,000 $12,500 Useful Life, Years 9 9 9 You - ZOOM
Wall’s Pharmacy will have to sell a new product that has an estimated revenue of $5,100 per month and costs of $1,000 per month with an initial purchase of $28,000. How long will Wall's Pharmacy have to sell a new product if the MARR is 3% per month? Wall's Pharmacy will have to sell a new product for __ months.
Problems and applications Q5
YOUR FATHER PLANS TO INVEST P500,000.00 IN AN AUTO WASHING MACHINE WITH THE FF DATA: (20 PTS.) WASHING CAPACITY- 12 CARS/HR AT 8HRS OPERATION/DAY FOR 6DAYS A WEEK AND 50 WEEKS/YEAR CAR WASH CHARGE-P25/CAR MANUAL LABOR COST ( 2 WORKERS)-P25/HR PER WORKER PLUS A PAID VACATION BENEFITS OF 2 WEEKS PER YEAR MAINTENANCE COST-P8500.00/MONTH DESIRED RATE OF RETURN ON THE CAPITAL-20% PRESENTLY YOUR FATHER IS EARNING P25,000.00/MONTH AS A REGULAR EMPLOYEE AND WANTS TO CONCENTRATE ON THIS BUSINESS AND WANT TO RECOVER HIS INVESTMENT IN 5 YEARS. USING ROR AND AW METHOD OF ECONOMY STUDIES, SHOULD YOUR FATHER PROCEED WITH THE INVESTMENT?
The sign of various amounts at different points in time in a cash flow diagram is to be decided based on the type of the decision problem Select one O True O False
3. Lesco Chemical is considering two processes for making a cationic polymer. Process A has a first cost of $100,000 and an AOC of $60,000 per year. Process B's first cost is $165,000. If both process will be adequate for 4 years and the rate of return on the increment between the alteratives is 25%, what is the amount of the AOC for process B?
Why the annual worth value give you the same exact value for the repeated period? (Why only the annual worth method will give you a value for one period and it will equal the same exact value for the repeated periods?)
Select the best alternative through internal rate of return analysis. Assume that the minimum attractive rate of return is 10% per year. Machine X |Machine YInitial cost $ 400,000.00 $ 500,000.00Annual operating cost $ 15,000.00 |$ 25,000.00 Annual profit $ 20,000.00 |$ 40,000.00Residual value $ 85,000.00 |$ 100,000.00Project life 15 years | none Engineering Economic Analysis
Economics A patch of land adjacent to the proposed international airport is likely to increase in value. The cost of land now is INR 8,00,000 and is expected to be worth INR 15,00,000 within 5 years. During this period it can be rented for small scale industry at INR 15000 per year. Annual taxes are presently is INR 8500 and likely to remain constant. What rate of return will be earned on the investment if the estimates are accurate? Draw cash flow diagram.
! Required information The annual revenues associated with several large apartment complexes are $225, $225, $275, $375, $75, and $125 for years 0, 1, 2, 3, 4, and 5, respectively. Determine the net cash flow and whether each cash flow series is conventional or nonconventional. The costs for years 0, 1, 2, 3, 4, and 5, respectively, are provided in the problems. When the cash flow is zero, assume it to be negative. Year 0 Cost, $ -1500 1 -450 The cash flow is conventional The Cumulative cash flow is 0 1 Year Cumulative CF, $ 2 -300 2 3 -400 3 4 -125 4 5 -400 5
One of the mutually exclusive alternatives below must be selected. Base your recommendation on A(Sauer-Glock) cash flows when the MARR = 15% per year. EOY EOY P/5 10 20 10 20 2P 2P Glock 40 Sauer 45 ..... The IRR on A(Sauer-Glock) is %. (Round to two decimal places.)