Question
In: Economics
You have a process with the following parameters. What is the EUAW (EUAB-EUAC) for the process,...
You have a process with the following parameters. What is the
EUAW (EUAB-EUAC) for the process, given a 15% interest rate?
First cost: $1.7M
O&M costs for Year 1: $29,000
Cost gradient: +$750/year (Year 2 is 29,750; year 3 is 30,500,
and so forth)
Annual benefit: $303,000
Salvage value: $210,000
Useful life, in years: 20
Solutions
Expert Solution
EUAB = 303000
EUAC = 1700000*(A/P,15%,20) + 29000 + 750*(A/G,15%,20) - 210000*(A/F,15%,20)
= 1700000*0.159761 + 29000 + 750*5.365137 - 210000*0.009761
= 302567.74
EUAW = EUAB - EUAC = 303000 - 302567.74 = 432.26 ~ 432
Using Excel
| Investment | O&M cost | Annual Benefit | Salvage | Net Cash flow | |
| 0 | -17,00,000.00 | -17,00,000.00 | |||
| 1 | -29,000.00 | 3,03,000.00 | 2,74,000.00 | ||
| 2 | -29,750.00 | 3,03,000.00 | 2,73,250.00 | ||
| 3 | -30,500.00 | 3,03,000.00 | 2,72,500.00 | ||
| 4 | -31,250.00 | 3,03,000.00 | 2,71,750.00 | ||
| 5 | -32,000.00 | 3,03,000.00 | 2,71,000.00 | ||
| 6 | -32,750.00 | 3,03,000.00 | 2,70,250.00 | ||
| 7 | -33,500.00 | 3,03,000.00 | 2,69,500.00 | ||
| 8 | -34,250.00 | 3,03,000.00 | 2,68,750.00 | ||
| 9 | -35,000.00 | 3,03,000.00 | 2,68,000.00 | ||
| 10 | -35,750.00 | 3,03,000.00 | 2,67,250.00 | ||
| 11 | -36,500.00 | 3,03,000.00 | 2,66,500.00 | ||
| 12 | -37,250.00 | 3,03,000.00 | 2,65,750.00 | ||
| 13 | -38,000.00 | 3,03,000.00 | 2,65,000.00 | ||
| 14 | -38,750.00 | 3,03,000.00 | 2,64,250.00 | ||
| 15 | -39,500.00 | 3,03,000.00 | 2,63,500.00 | ||
| 16 | -40,250.00 | 3,03,000.00 | 2,62,750.00 | ||
| 17 | -41,000.00 | 3,03,000.00 | 2,62,000.00 | ||
| 18 | -41,750.00 | 3,03,000.00 | 2,61,250.00 | ||
| 19 | -42,500.00 | 3,03,000.00 | 2,60,500.00 | ||
| 20 | -43,250.00 | 3,03,000.00 | 2,10,000.00 | 4,69,750.00 | |
| NPW | 2,701.25 | ||||
| AW | 431.56 |
Showing formula in Excel
| Investment | O&M cost | Annual Benefit | Salvage | Net Cash flow | |
| 0 | -1700000 | =N8+O8+P8+Q8 | |||
| 1 | -29000 | 303000 | =N9+O9+P9+Q9 | ||
| 2 | =O9-750 | 303000 | =N10+O10+P10+Q10 | ||
| 3 | =O10-750 | 303000 | =N11+O11+P11+Q11 | ||
| 4 | =O11-750 | 303000 | =N12+O12+P12+Q12 | ||
| 5 | =O12-750 | 303000 | =N13+O13+P13+Q13 | ||
| 6 | =O13-750 | 303000 | =N14+O14+P14+Q14 | ||
| 7 | =O14-750 | 303000 | =N15+O15+P15+Q15 | ||
| 8 | =O15-750 | 303000 | =N16+O16+P16+Q16 | ||
| 9 | =O16-750 | 303000 | =N17+O17+P17+Q17 | ||
| 10 | =O17-750 | 303000 | =N18+O18+P18+Q18 | ||
| 11 | =O18-750 | 303000 | =N19+O19+P19+Q19 | ||
| 12 | =O19-750 | 303000 | =N20+O20+P20+Q20 | ||
| 13 | =O20-750 | 303000 | =N21+O21+P21+Q21 | ||
| 14 | =O21-750 | 303000 | =N22+O22+P22+Q22 | ||
| 15 | =O22-750 | 303000 | =N23+O23+P23+Q23 | ||
| 16 | =O23-750 | 303000 | =N24+O24+P24+Q24 | ||
| 17 | =O24-750 | 303000 | =N25+O25+P25+Q25 | ||
| 18 | =O25-750 | 303000 | =N26+O26+P26+Q26 | ||
| 19 | =O26-750 | 303000 | =N27+O27+P27+Q27 | ||
| 20 | =O27-750 | 303000 | 210000 | =N28+O28+P28+Q28 | |
| NPW | =NPV(15%,R9:R28)+R8 | ||||
| AW | =PMT(15%,20,-R29) |
Rahul Sunny answered 7 months agoRelated Solutions
What are the roles of these parameters in the pultrusion process of fibreglass? ( the three...
What are the roles of these parameters in the pultrusion process of
fibreglass? ( the three temperatures in hearing die, ambient
temperature and relative humidity , line speed, weight percent of
resin, weight percent of low profile additive, weight percent of
the initiator, roving count )
What is the process of solid waste management and different parameters? what are the problems of...
What is the process of solid waste management and different
parameters?
what are the problems of solid waste management ? What are the
solutions for solid waste?
what are the recommendations for improving solid waste
management?
what are unsuitable characteristics ,disposal and treatment of
sewarage waste?
what are parameters t for the proper management of sewage
waste?
Discuss the concept of parameters. What are parameters for? What is the difference between formal parameters...
Discuss the concept of parameters. What are parameters for? What
is the difference between formal parameters and actual parameters?
Give an example in Java code that illustrates formal parameters and
actual parameters.
What are mechanical property parameters and what are physical property parameters? What are their differences?
What are mechanical property parameters and what are physical
property parameters? What are their differences?
What are the operational steps ofa work cycle? Identify activities and process parameters for each step...
What are the operational steps ofa work cycle?
Identify activities and process parameters for each step of the
operation.
What does reliability mean to you? In your experience, what healthcare process have you found to...
What does reliability mean to you? In your experience, what
healthcare process have you found to be reliable? What process have
you found to be unreliable? Explain what is different about the
reliable process versus the unreliable process
If you have not been part of the budgeting process before what you believe would be...
If you have not been part of the budgeting process before what
you believe would be the biggest challenge
Using what you have learned about process mapping in this week’s resources, create a process mapping...
Using what you have learned about process mapping in this week’s
resources, create a process mapping flowchart to measure
operational data of the activity using Microsoft PowerPoint or
Microsoft Visio. Identify the important measurements within your
process which provide operational data. Then, based on the process
map you have created, list and describe these measurements and the
critical path within your process, utilizing any additional process
improvement tools necessary. Your completed Assignment should
include the flowchart, a description of process...
Using what you have learned about process mapping in this week’s resources, create a process mapping...
Using what you have learned about process mapping in this week’s
resources, create a process mapping flowchart to measure
operational data of the activity using Microsoft PowerPoint or
Microsoft Visio. Identify the important measurements within your
process which provide operational data. Then, based on the process
map you have created, list and describe these measurements and the
critical path within your process, utilizing any additional process
improvement tools necessary. Your completed Assignment should
include the flowchart, a description of process...
information about the metal additive manufacturing process and defects and parameters
information about the metal additive manufacturing process and
defects and parameters
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- A neurologist needs to counsel a stroke victim and her husband about possible outcomes, treatment options,...
- Case Study: Personal Beliefs in the Workplace Don Shakow was a prominent professional who worked in...
- 1: Competency framework usage is the modern best practice in management. What is meant by competency...
- A 19.34 g mixture of sugar (C12H22O11) and table salt (NaCl) is dissolved in 231 g...
- Young and Company claims that its pressurized diving bell will, on average, maintain its integrity to...
- 1) Alternative compiled code sequence using instructions in classes A, B, C. What is the average...
- An asset is purchased on January 1 for $48,700. It is expected to have a useful...
ADVERTISEMENT