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

Expert Solution

Rahul Sunny answered 8 months ago
Next > < Previous

Related 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...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT