Give explanation step by step and take a like 5.47 Petrobras, the Brazilian energy company, has iden-tified two alternatives to provide potable water tooffshore platforms-purchase and operate theequipment, or contract long term with Manal andAssociates, an international oilfield service corpo-ration. For the estimates shown, use capitalizedcost analysis at i = 6% per year to determine (a) thebetter economic choice for Petrobras, and (b) themaximum annual M&O cost that will cause Manaland Associates to succeed in winning the contract.AlternativePurchaseFirst cost, $-300,000M&O, $ per year-10,000, year 1+2% increase eachyear thereafterSalvage value, $70,000Expected use, years8Contract-850,000-10,00040+

Step 1:Calculation of better economic choice for Petrobras is shown below: Formula sheet for the…

Answered: 5.47 Petrobras, the Brazilian energy…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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…
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)] A B C $2,300,000 $2,780,000 $2,540,000 $82,000 $118,000 $97,000 $580,000 $670,000 $650,000 $65,000 $78,000 $71,000 $11,000 $15,000 $12,500 9 9 9 Data First Cost Salvage Value Annual Benefit M&O M&O Gradient Useful Life, Years You
Street lighting fixtures and their sodium vapor bulbs for a two-block area of a large city need to be installed at a first cost (investment cost) of $120,000. Annual maintenance expenses are expected to be $6,650 for the first 10 years and $10,000 each year thereafter upto 25 years. With an interest rate of 10% per year, what is the present worth cost of this project? Choose the closest answer below. OA. The present worth cost of the project is $251,632. OB. The present worth cost of the project is $271,133. OC. The present worth cost of the project is $236,922. OD. The present worth cost of the project is $190,186.
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
An environmental engineer is considering three methods for disposing of a non-hazardous chemical sludge: land application, fluidized-bed incineration, and private disposal contract. The estimates for each method are below. Determine the equivalent present worth value of the LAND APPLICATION using its AW value based on 10% per year. Refer to table 2 for additional information. Table 2 Land Application Inciner- ation Contract Firg cost, S -150.000 -a00 000 Annual cost, Syear -95.000 -60,000 -170,000 Salvage value, S Life, years 25.000 300,000 4. 6. O $1,158,329 O $-1,158,329 O $933,027 O $-933,027 O No correct answer
A firm spent $2 million for new equipment that reduces greenhouse gases in their operations. The process improvement saved them $14,000 in the first month. (a) What is the first month’s rate of return on this investment? Express that value on an annual effective basis. (b) If this investment was judged not to make economic sense, should some entity pay to reduce such emissions? Who and why?
Street lighting fixtures and their sodium vapor bulbs for a two-block area of a large city need to be installed at a first cost (investment cost) of $130,000. Annual maintenance expenses are expected to be$6,500for the first8years and$8,500 each year thereafter upto 25years. With an interest rate of 9% per year, what is the present worth cost of this project? Choose the closest answer below. A) $202,422 B $238,597 C) $249,468 D) $277,339
Consider the comparison between alternatives A and B. Using present worth method of analysis, and at an interest rate of 10% per year, the values of n that you should use in the uniform series factors to make a correct comparison are: A B First Cost ₱500,000 ₱900,000 Annual Operating Cost ₱100,000 ₱40,000 Salvage Value ₱130,000 ₱150,000 Life 3 years 6 years a. n=3 years for A and n=3 years for B b. n=3 years for A and n=6 years for B c. n=6 years for A and n=6 years for B d. n=6 years for A and n=3 years for B
The president of INDE232 Company is considering an external long-term contract offer that will significantly improve the energy efficiency of their imaging systems. The payment schedule has two large payments in the first years with continuing payments thereafter. The proposed schedule is $200 now, $300 four years from now, $50 every 5 years, and an annual amount of $8 beginning 15 years from now. Determine the capitalized cost at 11% per year Select one: O a. 375 O b. 1265 O C.487 O d. 454 O e. 1030
For the net cash flow series shown, (a) apply the two rules of sign change, (b) find the external rate of return using the ROIC method at an investment rate of 15% per year, and (c) determine an i* using the IRR function with and without the ROIC determined in part (b). A Year 1 Net Cash Flow, $ 2 48,000 1 2 20,000 -90,000 50,000 4 3 6 4 -10,000 According to the rule of signs, there can be up to three v rate of return values. According to the cumulative cash flow test, the i*value is inconclusive The external rate of return according to the ROIC method is %. The rate of return using the IRR function is -27| %.
Seawater contains 2.1 pounds of magnesium per ton. By using the processingmethod A, 85% of the metal can be recovered at a cost of 3.25 per ton of water pumped andprocessed. If process B is used, 70% of the available metal is recovered, at a cost of only 2.60per ton of water pumped and processed. The two processes are substantially equal as toinvestment costs and time requirements. (a) If the extracted metal can be sold for 2.40 perpound, which processing method should be used? (b) At what selling price for the metal wouldbe two processes be equally economical?Answer with complete solution brief explanation. Thank you.
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.

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