ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Chapter 8, Problem 14P
(a)
To determine
To construct:A choice table for interest tables from 0% to 100%
(b)
To determine
To select:The best alternative at MARR of 12%.
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Acme Tools has four alternatives for an injection molding machine (A, B, C, D) as shown below. MARR is
20%. Use incremental cash flow analysis to determine the economically optimal system. Solve this
problem in Excel, copy and paste the Excel model below, and provide an interpretation.
A
B
C
D
Capital Investment
$295,000
$350,000
$310,000 $340,000
Net Annual Revenue
$75,000
$90,000
$75,000 $85,000
Residual Value
$60,000
$82,000
$96,000
$85,000
Study Period
6 Years
6 Years
6 Years
6 Years
Nelson, Inc. is considering investing in new and more efficient equipment The
equipment has 10-year life with the first cost of $800,000. The annual operating
cost is $40.000 in year one and increases by $20,000 per year. The salvage value
expected to be $50,000 and Nelson's MARR is 10%.
a Calculate the capital recovery (CR) of nonrecurring cash flows.
b. Calculate the annual worth (AW) of this equipment.
Empire Limited is trying to decide between two machines which are necessary in their manufacturing facility. Data concerning the two machines are presented below. If the company has a minimum attractive rate of return (MARR) of 10%, which machine should be chosen?
Use co-terminated assumption (5 years) and compare using Present Worth Method.
Note: Show final answer to the nearest WHOLE NUMBER
Answer the following:
a. The Present Worth of Alternative A is = $ Blank 1
b. The Present Worth of Alternative B is = $ Blank 2
c. Choose Alternative (Type only A or B) = Blank 3
Chapter 8 Solutions
ENGR.ECONOMIC ANALYSIS
Ch. 8 - Prob. 1QTCCh. 8 - Prob. 2QTCCh. 8 - Prob. 3QTCCh. 8 - Prob. 4QTCCh. 8 - Prob. 5QTCCh. 8 - Prob. 1PCh. 8 - Prob. 2PCh. 8 - Prob. 3PCh. 8 - Prob. 4PCh. 8 - Prob. 5P
Ch. 8 - Prob. 6PCh. 8 - Prob. 7PCh. 8 - Prob. 8PCh. 8 - Prob. 9PCh. 8 - Prob. 10PCh. 8 - Prob. 11PCh. 8 - Prob. 12PCh. 8 - Prob. 13PCh. 8 - Prob. 14PCh. 8 - Prob. 15PCh. 8 - Prob. 16PCh. 8 - Prob. 17PCh. 8 - Prob. 18PCh. 8 - Prob. 19PCh. 8 - Prob. 20PCh. 8 - Prob. 21PCh. 8 - Prob. 22PCh. 8 - Prob. 23PCh. 8 - Prob. 24PCh. 8 - Prob. 25PCh. 8 - Prob. 26PCh. 8 - Prob. 27PCh. 8 - Prob. 28PCh. 8 - Prob. 29PCh. 8 - Prob. 30PCh. 8 - Prob. 31PCh. 8 - Prob. 32PCh. 8 - Prob. 33PCh. 8 - Prob. 34PCh. 8 - Prob. 35PCh. 8 - Prob. 36PCh. 8 - Prob. 37PCh. 8 - Prob. 38PCh. 8 - Prob. 39PCh. 8 - Prob. 40PCh. 8 - Prob. 41PCh. 8 - Prob. 42PCh. 8 - Prob. 43PCh. 8 - Prob. 44PCh. 8 - Prob. 45P
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