Question
In: Economics
Three mutually exclusive design alternatives are beimg considered. The estimated cah flows for each alternative are...
Three mutually exclusive design alternatives are beimg considered. The estimated cah flows for each alternative are given below. The MARR is 20% per year. At the conclusion of the useful life, the investment will be sold. A decision-maker can select one of these alternatives or decide to select none of them. Make a recommendation using the PW method. Which alternative would you select?
Solutions
Rahul Sunny answered 9 months agoRelated Solutions
Three mutually exclusive design alternatives are beimg considered. The estimated cah flows for each alternative are...
Three mutually exclusive design alternatives are beimg
considered. The estimated cah flows for each alternative are given
below. The MARR is 20% per year. At the conclusion of the useful
life, the investment will be sold. A decision-maker can select one
of these alternatives or decide to select none of them. Make a
recommendation using the PW method. Which alternative would you
select?
Three mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are...
Three mutually exclusive design alternatives are being
considered. The estimated cash flows for each alternative are given
below. The MARR is 12% per year. At the end of the useful life,
the investment will be sold. A decision-maker can select one of
these alternatives or decide to select none of them. Make a
recommendation using the PW method.
X
Y
Z
Investment cost
$275,000
$140,000
$370,000
Annual revenue
$85,840
$53,207
$93,911
Annual cost
$23,183
$14,370
$20,543
Useful life
15 years...
Two mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are...
Two mutually exclusive design alternatives are being considered.
The estimated cash flows for each alternative are given below. The
MARR is 10% per year. A decision maker must select one of these
alternatives.
A B
Investment cost $50,000 $30,000
Annual Revenue 15,000 10,000
Salvage value 5,000 3,000
Useful life (yrs.) 5 5
For all parts below, do not convert from another form of
equivalent worth; e.g., AW→FW. 1. Compute the AW for Alt A. Based
on this measure, should the...
Three mutually exclusive investment alternatives are being considered. The estimated cash flows for each alternative are...
Three mutually exclusive investment alternatives are being
considered. The estimated cash flows for each alternative are given
below. The study period is 30 years and the firm's MARR is 17% per
year. Assume repeatability and reinvestment of positive cash
balances at 17% per year.
a. What is the simple payback period for
Alternative 1?
b. What is the annual worth of Alternative
2?
c. What is the IRR of the incremental cash
flows of Alternative 2 compared to Alternative 1?...
Three mutually exclusive investment alternatives are being considered. The estimated cash flows for each alternative are...
Three mutually exclusive investment alternatives are being
considered. The estimated cash flows for each alternative are given
below. The study period is 30 years and the firm's MARR is 10%
per year. Assume repeatability and reinvestment of positive cash
balances at 10% per year.
a. What is the simple payback period for Alternative 1?
b. What is the annual worth of Alternative 2?
c. What is the IRR of the incremental cash flows of Alternative
2 compared to Alternative 1?...
Final Finishing is considering three mutually exclusive alternatives for a new polisher. Each alternative has an...
Final Finishing is considering three mutually exclusive
alternatives for a new polisher. Each alternative has an expected
life of 10 years and no salvage value. Polisher I requires an
initial investment of $20,000 and provides annual benefits of
$4,465. Polisher II requires an initial investment of $10,000 and
provides annual benefits of $1,770. Polisher III requires an
initial investment of $15,000 and provides annual benefits of
$3,580. MARR is 15%/yr. Based on an internal rate of return
analysis, which polisher...
There are three mutually exclusive alternatives being considered. One of the three must be selected, so this...
There are three mutually exclusive alternatives being
considered. One of the three must be selected, so this
is a set of three cost alternatives. MARR is 15% and the
life of each project is 12 years. These projects
are:
Project I
Capital Cost: $130,000
Revenue/Savings: 22,000
Expense/Cost: $12,000
Salvage: $25,000
Project II
Capital Cost: $100,000
Revenue/Savings: $10,000
Expense/Cost: $15,000
Salvage: $20,000
Project III
Capital Cost: $160,000
Revenue/Savings: $10,000
Expense/Cost: $20,000
Salvage: $40,000
please solve asap, thank you!
1. Three mutually exclusive projects are being considered. The cash flows for each and corresponding rate...
1. Three mutually exclusive projects are being considered. The
cash flows for each and corresponding rate of return are list
below. MARR = 8% can any project eliminated? Using functional
notation to solve for the incremental rate of return.
1
2
3
0
-20000
-25000
-29000
1
2000
2500
3000
2
5000
6200
7000
3
8000
9900
11000
4
11000
13600
15000
ROR
9%
8.7%
7.4%
2. Which project must you choose based on the information provided
below using conventional...
Three (3) mutually exclusive alternatives are being considered for the production equipment at a toilet tissue...
Three (3) mutually exclusive alternatives are being considered
for the production equipment at a toilet tissue paper factory. The
estimated cash flows for each alternative are given here. (All cash
flows are in thousands.).
Use the EUAW (Equivalent Uniform Annual Worth) method to
determine which equipment alternative, if any should be selected?
The firm’s MARR is 18%. Cash flow diagrams must be included.
A
B
C
Capital investment
2000
4200
7000
Annual revenues
3200
6000
8000
Annual costs
2100
4000...
Two mutually exclusive alternatives are bring considered: A and B. Both alternatives cost $1,200 at the...
Two mutually exclusive alternatives are bring considered: A and
B. Both alternatives cost $1,200 at the present. However, the
pattern of revenue from them is different. Alternative A has the
potential to bring more revenues later in the project life. The
expected revenues of alternative A are: $350, $500, and $850 by the
ends of years one to three, respectively. Alternative B promises
more immediate cash inflow which is expected to diminish with time:
$750, $300, and $100 by the...
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