Question
In: Economics
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 | 3,500 | 5,000 |
| Recovery Period, Years | 3 | 3 |
The PW for alternative X is determined to be $____.
The PW for alternative Y is determined to be $_____.
Alternative (Click to select) Y X is selected.
Solutions
Expert Solution
Given that ;
The after-tax minimum acceptable rate of return (MARR) is 8% per year,
Te = 40% and The (GI - OE) estimate is made for the first 3 years
we have calculated the computation of present worth(PW)
Rahul Sunny answered 1 year agoRelated Solutions
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...
Compare two alternatives, A and B on the basis of a present worth evaluation using i=8%...
Compare two alternatives, A and B on the basis of a present
worth evaluation using i=8% per year and study period of 8 years.
Which alternative should be selected based on PW calculation and
what is the PW value of the selected alternative?
Show work for both alternatives. No excel.
Alternative
A
B
First cost, $
-15,000
-28,000
Annual operating cost
-6,000
-9,000
Overhaul in year 4
-
-2,000
Salvage value
3,000
5,000
Life, Years
4
8
For the below ME alternatives , which machine should be selected based on the PW analysis....
For the below ME alternatives , which machine should be selected
based on the PW analysis. MARR=10%.
Machine A
Machine B
Machine C
First cost, $
15000
30000
11,265
Annual cost, $/year
14,021
6,000
4,000
Salvage value, $
4,000
5,000
1,000
Life, years
3
6
2
Answer the below questions :
C- PW for machine C =
For the below ME alternatives , which machine should be selected based on the PW analysis....
For the below ME alternatives , which machine should be selected
based on the PW analysis. MARR=10%
Machine A
Machine B
Machine C
First cost, $
22,421
30000
10000
Annual cost, $/year
8,497
6,000
4,000
Salvage value, $
4,000
5,000
1,000
Life, years
3
6
2
Answer the below questions :
A- PW for machine A=
For the below ME alternatives , which machine should be selected based on the PW analysis....
For the below ME alternatives , which machine should be selected
based on the PW analysis. MARR=10%
Machine A
Machine B
Machine C
First cost, $
15000
21,476
10000
Annual cost, $/year
8,095
6,000
4,000
Salvage value, $
4,000
5,000
1,000
Life, years
3
6
2
Answer the below questions :
B- PW for machine B=
For the below ME alternatives , which machine should be selected based on the PW analysis....
For the below ME alternatives , which machine should be selected
based on the PW analysis. MARR=10%
Machine A
Machine B
Machine C
First cost, $
23,979
30000
10000
Annual cost, $/year
8,679
6,000
4,000
Salvage value, $
4,000
5,000
1,000
Life, years
3
6
2
Answer the below questions :
A- PW for machine A=
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...
"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...
For the below ME alternatives , which machine should be selected based on the PW analysis. MARR=10%.
For the below ME alternatives , which machine should be selected based on the PW analysis. MARR=10%.Machine AMachine BMachine CFirst cost, $ 15000 30000 10,423Annual cost, $/year 12,340 6,000 4,000Salvage value, $ 4,000 5,000 1,000Life, years 362Answer the below questions :A- PW for machine C =B- Based on the PW value you got in the previous questions, which machine we should select? type you explanation below
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