Question

In: Economics

You are an engineering and you have 2 alternatives with the following cash flow. if MARR...

You are an engineering and you have 2 alternatives with the following cash flow. if MARR is 5% , which alternative you will select A or B . Hint Assume PW cost = PW benefits

Year A B Differences between A snd B
0 -2000 -2800 ?
1 +800 +1100 ?
2 +800 +1100 ?
3 +800 +1100 ?

Solutions

Expert Solution


CALCULATION:

Please like the solution if it is helpful. Thank you.


Related Solutions

Consider the following cash flow profile, and assume MARR is 8percent/year. EOY 0 1 2 3...
Consider the following cash flow profile, and assume MARR is 8percent/year. EOY 0 1 2 3 4 5 6 NCF $-75 $11 $11 $11 $11 $11 $11 a. What does Descartes' rule of signs tell you about the IRR(s) of the project? b. What does Norstrom’s criterion tell us about the IRR(s) of this project? c. What is the IRR(s) for this project? d. Is this project economically attractive?
Show all work. Use a MARR of 2% ! The cost projections for two alternatives for...
Show all work. Use a MARR of 2% ! The cost projections for two alternatives for a proposed bridge are provided below. Which alternative would you recommend in order to minimize cost? (Use a MARR of 2%) A B Initial Construction costs $      15,000,000.00 $      45,000,000.00 Annual Maintenance Costs $         3,750,000.00 $         2,000,000.00
Consider the cash flow for an investment project with MARR = 15.9%. Determine the annual equivalent...
Consider the cash flow for an investment project with MARR = 15.9%. Determine the annual equivalent worth for the project. The answer could be negative. The cash flow for years 0 through 4 in dollars is as follows: -2,700 1,700 1,200 1,500 250"
"Consider the cash flow for an investment project with MARR = 17.4%. Determine the annual equivalent...
"Consider the cash flow for an investment project with MARR = 17.4%. Determine the annual equivalent worth for the project. The cash flow for years 0 through 4 in dollars is as follows: -4,100 1,600 1,700 1,300 540"
Consider the following cash flow profile and assume MARR is 10%/year. EOY NCF 0 $-95 1...
Consider the following cash flow profile and assume MARR is 10%/year. EOY NCF 0 $-95 1 $20 2 $20 3 $50 4 $-50 5 $50 6 $20 Determine the IRR for this project.
Compare the following three alternatives by the IRR method, given MARR of 8%/year. First find if...
Compare the following three alternatives by the IRR method, given MARR of 8%/year. First find if they are feasible and then compare them with the incremental rate of return method (DROR). Alt. Construction cost $       Benefits $/yr Salvage $ Service Life (yrs) A 510,000 145,000 10,000 5 B 775,000 155,000 15,000 9 C 1,075,000 165,000 20,000 11
Given the following 4 alternatives, the best alternative using the incremental ROR analysis at MARR= 13%...
Given the following 4 alternatives, the best alternative using the incremental ROR analysis at MARR= 13% is: Dealer 1 2 3 4 First Cost, $ -5,000 -6,500 -10,000 -15,000 Annual Average Cost per repair, $ -3500 -3200 -3000 -2000 Close-out value, $ +500 +900 +700 +1000 Life, years 8 8 8 8 Group of answer choices Alt. 1 Alt. 2 Alt. 3 Alt. 4
Other things held constant, which of the following alternatives would increase a company's cash flow for...
Other things held constant, which of the following alternatives would increase a company's cash flow for the current year? a. Increase the days' sales outstanding (DSO) without reducing sales b. Purchase new equipment c. Decrease the accounts payable balance d. Increase the inventory turnover ratio without affecting sales e. Decrease the accrued wages balance ____    2.   You observe that a firm's ROE is above the industry average, but its profit margin and debt ratio are both below the industry average....
Consider the following alternatives for a Beta company investment project: Net cash flow n Proyect A...
Consider the following alternatives for a Beta company investment project: Net cash flow n Proyect A Proyect B 0 -10,000 -20,000 1 5,500 0 2 5,500 0 3 5,500 40,000 IRR 30% ? PW(15%) ? 6,300 The company's MARR for this type of project is 15%. (a) Determine the IRR of project B. (b) Calculate the PW of project A. (c) Suppose alternatives A and B are mutually exclusive, determine which of them is more attractive using the rate of...
Dertermine which of the two following cash flows is preferable, using a MARR of 12%. You...
Dertermine which of the two following cash flows is preferable, using a MARR of 12%. You can use any method you prefer and may assume repeatability is an acceptable assumption. Option A requires an initial investment of $35000 and produces for five years an annual return of $9400. The salvage value at five years is expected to be $5000. Option B requires an initial investment of $50000 and produces an annual return for seven years of 10300. The salvage value...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT