Homework Answers
| Alt | Construction Cost | Annual Benefits(1) | Cummulative PVF adjusted for inflation | PV of Annual Benefits(2) | Net Benefit(2-1) | Feasibility |
| (Intial Out Lay) | ||||||
| A | 105000.00 | 40000.00 | 3.9290 | 157160.00 | 52160 | Yes |
| B | 230000.00 | 52000.00 | 4.5381 | 235981.20 | 5981.2 | Yes |
| C | 350000.00 | 64000.00 | 5.0989 | 326329.60 | -23670.4 | No |
| D | 600000.00 | 100000.00 | 5.6152 | 561520.00 | -38480 | No |
| If Net Benefit is positive it is feasible to invest otherwise not so if we consider only B/C then it advisable to invest in B since it is giving positive Net benefit | ||||||
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4. Compare the following altemtives given a market rate of 3.45% per year and an inflation...
Compare the following alterntives given a market rate of 5.45% per year and an inflation rate...
Compare the following alterntives given a market rate of 5.45% per year and an inflation rate of 3% per year. Use first the B/C method to determine feasibility and then the incremental B/C method to determine the oprimum level of investment. Alt Construction Cost $ Annual Benefits $/yr Life yrs A 105,000 40,000 5 B 230,000 52,000 6 C 350,000 64,000 7 D 600,000 100,000 8
Compare the following alterntives given a market rate of 5.45% per year and an inflation rate of 3% per year. Use firs...
Compare the following alterntives given a market rate of 5.45% per year and an inflation rate of 3% per year. Use first the B/C method to determine feasibility and then the incremental B/C method to determine the oprimum level of investment. Alt Construction Cost $ Annual Benefits $/yr Life yrs A 105,000 40,000 5 B 230,000 52,000 6 C 350,000 64,000 7 D 600,000 100,000 8
4. After checking the feasibility of each alternative below, compare them using the Incremental IRR method...
4. After checking the feasibility of each alternative below, compare them using the Incremental IRR method to decide which one is best. MARR=10%. Suggestion: Use the NEUA-0 defintion of the IRR. Alt А Cosntruction cost s 50000 75000 95000 Annual benefits S/yr | Life yrs 15000 18000 20000
Compare the following 2 alternatives using the Net Present Worth (NPS) method – rate is 3%...
Compare the following 2 alternatives using the Net Present Worth (NPS) method – rate is 3% per year. Draw all cash flow diagrams. Please show work using a formula. Alt. Construction Cost ($) Benefit ($/yr.) Service Life (yrs.) A 380,000 200,000 7 B 450,000 220,000 7
5. Compare the following two alternatives by the IRR method, given MARR of 8%/year. Is the...
5. Compare the following two alternatives by the IRR method, given MARR of 8%/year. Is the incement in cost form A to B justified? Alt. Construction cost | Benefits Styr | Salvage Service Life (yrs 510,000 145,000 10,000 775,000 155,000 20,000
The rate is 2.75% 5. Copmare the following 2 altrernatives using the Net Equivalent Uniform Annual...
The rate is 2.75%
5. Copmare the following 2 altrernatives using the Net Equivalent Uniform Annual method Alt. Construction cost $ Benefit ($/yr) Salvage $ Service Life (yrs) A 1,500,000 400,000 40,000 9 B 2,300,000 550,000 80,000 18
7. An investor buys some land for $40,000 and sells it 12 years later for $115,000. at the time of sale was 26%. Inflation during this time was 4% per year. growth rate of return for this investm...
7. An investor buys some land for $40,000 and sells it 12 years later for $115,000. at the time of sale was 26%. Inflation during this time was 4% per year. growth rate of return for this investment? (10 points) The tax rate for gains What is the annual real You have a new job as an engineer and would like to buy a condominium in 4 years. real estate listings for the city where you live and condos similar...
4. Apply incremental conventional B/C analysis at an interest rate of 8% per year to determine...
4. Apply incremental conventional B/C analysis at an interest rate of 8% per year to determine which alternative should be selected. Use a 20-year study period, and assume the damage costs might occur in year 6 of the study period. Alternative A 600,000 50,000 Alternative B Initial cost, S Annual M&O 800,000 70,000 costs, S/year Potential damage 950,000 250,000 costs, $ [Ans. Inc. B/C 1.11]
I DO RATE. PLEASE ANWSER EVERYTHING CORRECT AND ORGANIZED SOLE RVEYTHING BY HAND NO SOFTWARE THANK...
I DO RATE. PLEASE ANWSER EVERYTHING CORRECT AND ORGANIZED SOLE
RVEYTHING BY HAND NO SOFTWARE THANK YOU
BONUS QUESTIONS 5a) A manufacturer of braided steel tire rubber molding equipment for automotive tire rubber fabrication in considering purchase either a semi-automatic or fully automatic system. The estima for each are as follows: Semi-Automatic Fully Automatic First Cost Annual Disbursement Annual Benefits Salvage Value Life $160,000 $ 3.000 $ 70,000 S 11,000 8 yrs $200,000 $ 6,000 $100,000 S 20,000 4 yrs...
h) If the total tax rate is 40% and the company requires an interest rate of...
h) If the total tax rate is 40% and the company requires an interest rate of 15%, calculate the 2020 NPV calculated through year 2042 for Process B (Disregard salvage value of plant(s) in 2042). i) Generate a plot of NPV vs required interest rate (range from 0% to 40%) calculated through year 2042 for Process B and overlay that plot against the one you made for Process A in step e. j) Which of these two processes would you...
4. After checking the feasibility of each alternative below, compare them using the Incremental IRR method to decide which one is best. MARR=10%. Suggestion: Use the NEUA-0 defintion of the IRR. Alt А Cosntruction cost s 50000 75000 95000 Annual benefits S/yr | Life yrs 15000 18000 20000
5. Compare the following two alternatives by the IRR method, given MARR of 8%/year. Is the incement in cost form A to B justified? Alt. Construction cost | Benefits Styr | Salvage Service Life (yrs 510,000 145,000 10,000 775,000 155,000 20,000
The rate is 2.75%
5. Copmare the following 2 altrernatives using the Net Equivalent Uniform Annual method Alt. Construction cost $ Benefit ($/yr) Salvage $ Service Life (yrs) A 1,500,000 400,000 40,000 9 B 2,300,000 550,000 80,000 18
7. An investor buys some land for $40,000 and sells it 12 years later for $115,000. at the time of sale was 26%. Inflation during this time was 4% per year. growth rate of return for this investment? (10 points) The tax rate for gains What is the annual real You have a new job as an engineer and would like to buy a condominium in 4 years. real estate listings for the city where you live and condos similar...
4. Apply incremental conventional B/C analysis at an interest rate of 8% per year to determine which alternative should be selected. Use a 20-year study period, and assume the damage costs might occur in year 6 of the study period. Alternative A 600,000 50,000 Alternative B Initial cost, S Annual M&O 800,000 70,000 costs, S/year Potential damage 950,000 250,000 costs, $ [Ans. Inc. B/C 1.11]
I DO RATE. PLEASE ANWSER EVERYTHING CORRECT AND ORGANIZED SOLE
RVEYTHING BY HAND NO SOFTWARE THANK YOU
BONUS QUESTIONS 5a) A manufacturer of braided steel tire rubber molding equipment for automotive tire rubber fabrication in considering purchase either a semi-automatic or fully automatic system. The estima for each are as follows: Semi-Automatic Fully Automatic First Cost Annual Disbursement Annual Benefits Salvage Value Life $160,000 $ 3.000 $ 70,000 S 11,000 8 yrs $200,000 $ 6,000 $100,000 S 20,000 4 yrs...
h) If the total tax rate is 40% and the company requires an interest rate of 15%, calculate the 2020 NPV calculated through year 2042 for Process B (Disregard salvage value of plant(s) in 2042). i) Generate a plot of NPV vs required interest rate (range from 0% to 40%) calculated through year 2042 for Process B and overlay that plot against the one you made for Process A in step e. j) Which of these two processes would you...
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