what's the PW of Alternative A and B? Use a MARR of 15% and useful life of 6 years to analyze the investmentalternatives below.AlternativeABCapital investment$100,000$125,000Annual revenues less expenses$34,000$41,000Market Value at EOY 6$4,000$5,000Project IRR25.6%24.1%In your supporting work, answer the following questions:1. Which alternative is more profitable and why?2. If you use the IRR method to select the best alternative, will youarrive at the same conclusion? Why or why not?

For Alternative A:Annuity Present Worth: PWannuity, A=$34,000×3.78419≈$128,672.41Single Future…

Answered: Use a MARR of 15% and useful life of 6…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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What is the best alternative using incremental Analysis? Use MARR = 15% A B C Capital Investment $ 2,000 7,000 4,200 Annual Revenues 3,200 8,000 6,000 Аппиal Costs 2, 100 5, 100 4,000 Market Value at the end of useful life 100 600 420 Useful Life (in years) 10 10 10 The correct ranking of Alternative is Blank 1 Select Alternative Blank 2 Note: Do not put comma, unit of measure and limit your answer to two decimal places. Ex: A-B-C
may 25 1 options are 5,270 ,51.30,51.30/5, 0 thousan thingamabobs, dollar,thingamabobs,thousand dollar. please add those where it fits. i wasnt able to share more than 2 scrrenshots
Kiwidale Dairy is considering purchasing a new ice-cream maker. Two models, Smoothie and Creamy, are available and their information is given below. (perform all calculation using 5 significant figures, and give your final answer to 1 decimal place). (a) What is Kiwidale's MARR that makes the two alternatives equivalent? Use a present worth comparison. Creamy First Cost 40,000 Service Life 12 years Annual profit 12,000 Annual operating cost 3,720 Salvage value 5,400 A MARR which makes the two alternatives equivalent in term of PW is Smoothie 15,000 12 years 4,700 1,400 2,250
Q2.The following incompatible plans have been suggested to an investor for investment. The life of these options is 4 years and their scrap value is zero. If the investor's minimum attractive annual rate of return is 14% percent, use the additional investment analysis to determine the option that maximizes the present value of the investor's profit. Initial investment cost 20000 10000 Plan Annual net income A 6530 5312 30000 7829
Need answe for Part D and E
Determine which option, if any, should be chosen based on net present worth using a 8% interest rate. Use Repeatability Method. Alternative A First Cost (Investment Cost) $ 5,000 $10,200 Uniform Annual Benefit $ 1,100 $2,300 Useful Life 5 years 10 years a. The Net Present Worth of Alternative A is = $ Blank 1 b. The Net Present Worth of Alternative B is = $ Blank 2 c. Choose Alternative (Type only A or B) = Blank 3
You are the boss of a consulting firm. One of your clients has brought to you a new project. The client s asking for an initial investment of $35,000. The project will return $5,000 for the next 4 years. If the company has a MARR set at 12%, what method would you use to evaluate this project? O Present Worth Method O Annual Worth Method O Future Worth Method O Internal Return Rate O External Return Rate
Qutestion 3 Solve this problem using the incremental Benefit - Cost ration with, expected life of 10 years and rate of return of 10% Alternative A Initial cost $50,000 Annual maintenance cost $4,000 Estimated annual benefit $15,000 Alternative B Initial cost $30,000 Annual maintenance cost $3,000 Estimated annual benefit $9,000 a. Select B with B/C=1.14 b. Select B with B/C=1.41 c. Select A with B/C=1.14 d. Reject A with B/C=1.14
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110 0 Le000 & (0) A 200 B 3000 2000 らoo0 2800 5000 9f MARR=SI. MARR=81. O x & Y ? MARR = 101 Initial Cost Annual benefit 95|120 Sal vage Value 50 150 use bul libe DO Nothinglon) 3. 200 700 6 yean 12yng
The city of St. John's is intalling a new swimming pool in the east end recreation centre. One design being considered is a reinforced concrete pool that will cost $5,400,000 to install. Thereafter, the inner surface of the pool will need to be refinished and painted every 5 years at a cost of $440,000 per refinishing. Assuming that the pool will have essentially an infinite life, what is the present worth of the costs associated with the pool design? The city uses a MARR of 10%. If the installation costs, refinishing costs, and MARR are subject to 5% or 10% increases or decreases, how is the present worth affected? (NOTE: Text answers are case sensitive and every field in this question is worth equal value) All calculations are performed using 4 significant figures. (a) Complete the table below: Sensitivity Analysis Calculated Values Parameter Construction Costs Refinishing Costs MARR [%] -10% -5% Base Case 5,400,000 440,000 10 +5% +10%
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