Question
In: Economics
"A company's present worth (PW) is given by the following equation: PW = -$180062 + 2.199X(Y-15)...
"A company's present worth (PW) is given by the following
equation: PW = -$180062 + 2.199X(Y-15) + 36560S, where X is the
demand, Y is the unit price, and S is a factor that determines the
salvage value. All three of these are random variables. Use
simulation, like SIPMath, to simulate the present worth of BMC with
100,000 trials.
Set X as a normal distribution with mean 2292 and standard
deviation 114. Set Y as a trianglular distribution with the minimum
equal to 49, the most likely equal to 51, and the maximum equal to
55. Set S as a uniform distribution (between 0 and 1, there are no
parameters).
After simulating 100,000 trials, calculate the probability that the
present worth is less than 0. Express your answer as a decimal
between 0 and 1."
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
Please Solve it ASAP. "A company's present worth (PW) is given by the following equation: PW...
Please Solve it ASAP.
"A company's present worth (PW) is given by the following
equation: PW = -$180069 + 2.056X(Y-15) + 33180S, where X is the
demand, Y is the unit price, and S is a factor that determines the
salvage value. All three of these are random variables. Use
simulation, like SIPMath, to simulate the present worth of BMC with
100,000 trials. Set X as a normal distribution with mean 2415 and
standard deviation 119. Set Y as a...
The IRR is the interest rate that makes the Present Worth "PW" of all the cash...
The IRR is the interest rate that makes the Present Worth "PW"
of all the cash flows (inflows and outflows) equal to zero
True
False
Perform a present worth (PW)-based evaluation of the two alternatives below using a spreadsheet. The after-tax...
Perform a present worth (PW)-based evaluation of the two
alternatives below using a spreadsheet. The after-tax minimum
acceptable rate of return (MARR) is 8% per year, Modified
Accelerated Cost Recovery System (MACRS) depreciation applies, and
Te = 40%. The (GI - OE) estimate is made for
the first 3 years; it is zero in year 4 when each asset is
sold.
Alternative
X
Y
First Cost, $
–8,000
–13,000
Salvage Value, Year 4, $
0
2,000
GI-OE, $ per Year...
Perform a present worth (PW)-based evaluation of the two alternatives below using a spreadsheet. The after-tax...
Perform a present worth (PW)-based evaluation of the two
alternatives below using a spreadsheet. The after-tax minimum
acceptable rate of return (MARR) is 8% per year, Modified
Accelerated Cost Recovery System (MACRS) depreciation applies, and
Te = 40%. The (GI - OE) estimate is made for
the first 3 years; it is zero in year 4 when each asset is
sold.
Alternative
X
Y
First Cost, $
–8,000
–13,000
Salvage Value, Year 4, $
0
2,000
GI-OE, $ per Year...
Perform a present worth (PW)-based evaluation of the two alternatives below using a spreadsheet. The after-tax...
Perform a present
worth (PW)-based evaluation of the two alternatives below using a
spreadsheet. The after-tax minimum acceptable rate of return (MARR)
is 8% per year, Modified Accelerated Cost Recovery System (MACRS)
depreciation applies, and Te = 40%. The (GI -
OE) estimate is made for the first 3 years; it is zero in year 4
when each asset is sold.
Alternative
X
Y
First Cost, $
–8,000
–13,000
Salvage Value,
Year 4, $
0
2,000
GI-OE, $ per
Year...
A breakeven analysis for net present worth is performed with a MARR of 15% and a...
A breakeven analysis for net present worth is performed with a
MARR of 15% and a useful life of 20 years with the following
data:
Initial Cost: $750,000
Annual Cost (O&M): $60,000/ year with an annual increase of
$5,000 each year
Annual Revenue: $80,000/ year with an annual increase of $1,000
each year
Salvage Value: $475,000
Determine the following:
a. If the project is viable (i.e. if the profit is larger than the
cost using net present worth).
b. The...
given the following data. use present worth analysis to find the best alternative, A, B, or...
given the following data.
use present worth analysis to find the best alternative, A, B,
or C.
Use an analysis period of 12 years and 15% interest.
A B C Initial cost $10,000 15,000 $12,000
Annual Benefit 6,000 10,000 5,000
Salvage benefit 1,000 -2,000 3,000
Useful life 2 years 3 years 4 years
* Use an analysis period of 12 years and 15% interest.
solve using both present worth analysis and
annual worth analysis
given the following data. use present worth analysis to find the best alternative, A, B, or...
given the following data. use present worth analysis to find the
best alternative, A, B, or C. Use an analysis period of 12 years
and 15% interest.
A B C
Initial cost $10,000 15,000 $12,000
Annual Benefit 6,000 10,000 5,000
Salvage benefir 1,000 -2,000 3,000
Useful life 2 years 3 years 4 years
* Use an analysis period of 12 years and 15% interest.
given the following data. use present worth analysis to find the best alternative, A, B, or...
given the following data. use present worth analysis to find the
best alternative, A, B, or C.
Use an analysis period of 12 years and 15% interest.
A B C
Initial cost $10,000 15,000 $12,000
Annual Benefit 6,000 10,000 5,000
Salvage benefit 1,000 -2,000 3,000
Useful life 2 years 3 years 4 years
* Use an analysis period of 12 years and 15% interest.
solve using both present worth analysis and
annual worth analysis
Problem 5.73 Given the following data, use present worth analysis to find the best alternative, A,...
Problem 5.73
Given the following data, use present worth analysis to find the
best alternative, A, B, or C.
Use an analysis period of 12 years and 15% interest.
Please show complete solution procedure, and include
cash flow diagram(s) for each machine.
Machine
A
B
C
Initial
cost
$10,000
$15,000
$12,000
Annual
benefit
$6,000
$10,000
$5,000
Salvage
value
$1,000
$-2,000
$3,000
Useful life
(yrs)
2
years 3
years
4 years
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