Compute the benefit ratio of the following project. Project cost Gross income Operating cost P 300,000 P 70,000 per year P 15,000 per year Rate of interest 12% Life of business 12 yrs
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- Please no written by hand and no emage Solve in excel Carp, Inc. wants to evaluate two machines for packaging their products.Machine A:Initial cost is $700,001st year O&M cost is 18,000; this cost increases $900 each year.The annual benefits are $154,000It can be sold at the end of 10 years useful life for $145,000 Machine B:Initial cost is $1,600,001st year O&M cost is 28,000; this cost increases $650 each year.The annual benefits are $300,000It can be sold at the end of 20 years useful life for $210,000The companies uses an interest rate of 15% Use annual cash flow analysis to decide which is the most desirable alternative.For the project with cash flow given below find the most sensitive factor among annual benefit, annual cost and salvage value if the changes by ±20%. Initial investment Annual revenue Annual Cost Salvage Value MARR Life in years Project Rs.2,00,000 Rs.1,00,000 Rs. 40,000 Rs. 50,000 10% 57 You received a memo that you are appointed as the team leader for a new commercial building project. Based on the estimation, if your team will be using a steel, it will cost 80,000 per month and 145000 cost if glass For the plan A, it has an annualmaintenance cost is 25000, 1000 repair cost every 2 years and a salvage value of 3000 after 15 years For the plan B, the repair cost is 3500 every 3 years, annual maintenance cost of 30000 and a salvage value of 1000 after 20 years. Compute for the capitalized cost if the money is worth 8% compounded annually and choose the best material for the project.CC PlanA = (2 decimal placesCC Plan B = (2 decimal places)
- Use Annual Cost Analysis to determine whether Alternative A or B should be chosen. The analysis period is 5 years. Assume an interest rate of 6% per year, compounded annually Alternative A Alternative B Initial Cost Annual Benefit Salvage Value Useful Life (yrs) 1800 150 400 5 4230 340 2100 5 Alternative B should be chosen, because its annual benefit is higher than Alternative A's Alternative A should be chosen, because its initial cost is lower than Alternative B's Alternative B should be chosen, because its equivalent annual cost is $85.30 higher than Alternative A's Alternative A should be chosen, because its equivalent annual cost is $85.30 lower than Alternative B'sAs an engineer, you are responsible to find the best alternative that is economically best. The cash flows shown in the table and the MARR is 11 % per year. Then please answer the following questions. Cash Flow Project 01 Project 02 Project 03 First Cost, $ -90000 220000 230000 Annual Cost, $ Per Year -60000 -21000 -17000 Overhaul Every 10 Years, $ _ _ -60000 Salvage Value, $ 8000 29000 11000 Life, Years 3 10 a) Find the Aw for Project 01. b) calculate the AW for Project 02 c) Calculate Aw for Project 03. What is your decision?A company that makes clutch disks for race cars has the annual net cash flows shown for one department. Year NCF, $1000 0 −65 1 30 2 84 3 −10 4 −12 (a) Determine the number of positive roots to the rate of return relation. (b) Calculate the internal rate of return. Is there a negative root? How is it treated? (c) Calculate the external rate of return using the return on invested capital (ROIC) approach with an investment rate of 15% per year (as assigned by your instructor, solve by hand and/or spreadsheet).
- Some mill investment project ,construction period of 2 years, 18- year production, infrastructure investment of 600 $, floating capital of 400$, construction fund in the first year of an input, no salvage value, if the desired rate of return on investments is 10%, try begging after put into production, the project's annual profit at least how much to make the project possible?1 Uniform Annual Cash Flow An engineer has an Huct uating fut ure budget for the maint enance of a particular machine. During cach of the first 5 years, $10,000 per year will he budget ed. During the second 5 years, the annual budget will be $15,000 per year. In addition, $5000 will be budgeted for an overhaul (major repair) of the machine at end of the 4th year, and again at the end of the 8th year. What uniform annual expenditure (EUAC) would be equivalent, if interest rate is 8% per year?As an engineer, you are responsible to find the best alternative that is economically best. The cash flows shown in the table and the MARR is 11 % per year. Then please answer the following questions. Cash Flow Project 01 Project 02 Project 03 First Cost, $ -90000 260000 270000 Annual Cost, $ Per Year -40000 -20000 -12000 Overhaul Every 10 Years, $ -70000 Salvage Value, $ 5000 27000 77000 Life, Years 10 a) Find the Aw for Project 01. b) calculate the AW for Project 02 c) Calculate Aw for Project 03. What is your decision? Explain it briefly in the text box and upload your handwritten solution.
- 4) Based on estimates the data for 2 types of bridges with different lives are as follows. If the minimum attractive rate of return is 10%, determine which project is more desirable using Annual Cost Method and ROR. Timber Bridge Steel Bridge First Cost P500k P850k Salvage Value 20k 100k Life in yrs 15 20 Annual maintenance 75k 50kA company is considering two types of equipment for its manufacturing plant. Pertinent data are as follows: Equipment Type A B Initial Cost 200 000 300 000 Annual Operating Cost 32 000 24 000 Annual Labor Cost 50 000 32 000 Other Costs 14 000 21 000 Life 10 years 10 years Salvage Value If the minimum required rate of return is 15%, which equipment should be selected? Use a) annual cost analysis; b) present worth analysis; and c) equivalent uniform annual cost method. 5.Complete the following analysis of cost alternatives and select the preferred alternative. The study period is 10 years and the MARR = 15% per year. "Do Nothing" is not an option. A B C Capital investment $15,000 $16,000 $13,500 $18,100 Annual costs 260 290 450 110 Market value at EOY 10 900 1,350 1,700 2,050 FW (15%) - $65,062 - $69,267 ??? - $73,408