Homework Answers
If there is an option of do nothing then it must be chosen because all the three alternatives shows negative net present worth (NPW) which means investing is a case of loss in all the three alternatives so do nothing option is the best one to avoid losses.
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Question 2 (1 point) Saved Three alternatives A, B, and C are being considered along with...
Question 1 (1 point) Saved The rate of return calculated from an incremental analysis represents ...
Question 1 (1 point) Saved The rate of return calculated from an incremental analysis represents the rate of return obtainable on the extra investment of the higher initial cost alternative. e True False Question 2 (1 point) When the mutually exclusive alternatives under consideration have only disbursements (service alternatives), the do nothing alternative must be included so that a rate of return analysis can be conducted on the incremental cash flow True False Question 3 (1 point) When more than...
Do not use Excel or tables 9-54 Three mutually exclusive alternatives are being considered: Initial cost...
Do not use Excel or tables
9-54 Three mutually exclusive alternatives are being considered: Initial cost Benefit at end of the first $500 $400 $300 200 200 200 100 4 year Uniform benefit at end of 100 125 subsequent years Useful life, in years At the end of its useful life, an alternative is not replaced. If the MARR is 10%, which alternative should be selected (a) Based on the payback period? (b) Based on benefit-cost ratio analysis?
Three mutually exclusive alternatives are being considered: Initial cost Benefit at end of the first $500...
Three mutually exclusive alternatives are being considered: Initial cost Benefit at end of the first $500 $400 $300 200 200 200 year Uniform benefit at end of 100 125 100 subsequent years Useful life, in years 4 At the end of its useful life, an alternative is not replaced. If the MARR is 10%, which alternative should be selected (a) Based on the payback period? (b) Based on benefit-cost ratio analysis?
Question 1 (1 point) Saved The rate of return calculated from an incremental analysis represents the...
Question 1 (1 point) Saved The rate of return calculated from an incremental analysis represents the rate of return obtainable on the extra investment of the higher initial cost alternative. e True False Question 2 (1 point) When the mutually exclusive alternatives under consideration have only disbursements (service alternatives), the do nothing alternative must be included so that a rate of return analysis can be conducted on the incremental cash flow True False Question 3 (1 point) When more than...
Three mutually exclusive wastewater treatment solutions (A, B, and C) are being considered. The equivalent uniform...
Three mutually exclusive wastewater treatment solutions (A, B, and C) are being considered. The equivalent uniform annual worth EUAW) is calculated at varying interest rates for each alternative as shown graphically below. 2000 1500 1000 500 -500 0% 2% 4% 4%. 6% 12% 14% w 1000 -1500 2000 INTEREST RATE (%) Calculate the exact incremental rate of return (IRR) for alternative B? The initial cost is $20,000, the uniform annual benefit is $3,550, and the salvage value is $3,000. Calculate...
1.) Two alternatives are being considered to perform a given job. Both of these alternatives provide...
1.) Two alternatives are being considered to perform a given job. Both of these alternatives provide equal service. The cost data for each alternative are provided in the tables below: Alternative 1 900,000 100,000 Alternative 2 300,000 30,000 Initial Cost Salvage Value Life, years Annual cost of operation and maintenance Required return 15,000 20,000 20 T20 Use a conventional cost comparison and determine: (a) An equivalent annual cost comparison assuming infinite service need. Which one do you choose? Why? (b)...
Question 3 (1 point) Saved You were given three cost-reduction proposals in your lower tier textile...
Question 3 (1 point) Saved You were given three cost-reduction proposals in your lower tier textile operation AO denotes the do-nothing alternative. The required investments are $320.000 for A1. $550,000 for A2, and $820,000 for A3. If the MARR is 15%, what system should be selected? You already estimated rates of return for the three projects, along with some incremental rates of return: Incremental Rate of Return (%) 18% 20 Incremental Investment A - Ao A₂ - Ao Az -...
9- Two alternatives with identical benefits are being considered: 49 A B Initial cost $500 $800...
9- Two alternatives with identical benefits are being considered: 49 A B Initial cost $500 $800 Uniform annual cost 200 150 Useful life, in years 8 8 (a) Compute the payback period if Alt. B is purchased rather than Alt. A (b) Use a MARR of 10% and benefit-cost ratio analysis to identify the alternative that should be selected
ANSWER THE FOLLOWING QUESTIONS:- Three mutually exclusive design alternatives are being considered. The estimated cash...
ANSWER THE FOLLOWING QUESTIONS:-
Three mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are given. The interest rate is 20% per year. At the conclusion of the useful life, the investment will be sold A C Investment cost $28,000 $55,000 $13,000 $28,000 $8,000 $40,000 Annual expenses Annual revenues $15,000 $23,000 $6,000 10 years $22,000 $32,000 13 $10,000 Salvage value Useful life 10 years 10 years A decision-maker can select one of these alternatives or...
Three mutually exclusive investment alternatives are being considered. The estimated cash flows for each wernative we...
Three mutually exclusive investment alternatives are being considered. The estimated cash flows for each wernative we given below. The study period is 30 years and the firm's MARR is 6% per year. Assume repeatability and reinvestment of positive cash balances at 6 per year a. What is the simple payback period for Alternative 1? b. What is the annual worth of Alternative 2? c. What is the IRR of the incremental cash flows of Alternative 2 compared to Aheative 1?...
Question 1 (1 point) Saved The rate of return calculated from an incremental analysis represents the rate of return obtainable on the extra investment of the higher initial cost alternative. e True False Question 2 (1 point) When the mutually exclusive alternatives under consideration have only disbursements (service alternatives), the do nothing alternative must be included so that a rate of return analysis can be conducted on the incremental cash flow True False Question 3 (1 point) When more than...
Do not use Excel or tables
9-54 Three mutually exclusive alternatives are being considered: Initial cost Benefit at end of the first $500 $400 $300 200 200 200 100 4 year Uniform benefit at end of 100 125 subsequent years Useful life, in years At the end of its useful life, an alternative is not replaced. If the MARR is 10%, which alternative should be selected (a) Based on the payback period? (b) Based on benefit-cost ratio analysis?
Three mutually exclusive alternatives are being considered: Initial cost Benefit at end of the first $500 $400 $300 200 200 200 year Uniform benefit at end of 100 125 100 subsequent years Useful life, in years 4 At the end of its useful life, an alternative is not replaced. If the MARR is 10%, which alternative should be selected (a) Based on the payback period? (b) Based on benefit-cost ratio analysis?
Question 1 (1 point) Saved The rate of return calculated from an incremental analysis represents the rate of return obtainable on the extra investment of the higher initial cost alternative. e True False Question 2 (1 point) When the mutually exclusive alternatives under consideration have only disbursements (service alternatives), the do nothing alternative must be included so that a rate of return analysis can be conducted on the incremental cash flow True False Question 3 (1 point) When more than...
Three mutually exclusive wastewater treatment solutions (A, B, and C) are being considered. The equivalent uniform annual worth EUAW) is calculated at varying interest rates for each alternative as shown graphically below. 2000 1500 1000 500 -500 0% 2% 4% 4%. 6% 12% 14% w 1000 -1500 2000 INTEREST RATE (%) Calculate the exact incremental rate of return (IRR) for alternative B? The initial cost is $20,000, the uniform annual benefit is $3,550, and the salvage value is $3,000. Calculate...
1.) Two alternatives are being considered to perform a given job. Both of these alternatives provide equal service. The cost data for each alternative are provided in the tables below: Alternative 1 900,000 100,000 Alternative 2 300,000 30,000 Initial Cost Salvage Value Life, years Annual cost of operation and maintenance Required return 15,000 20,000 20 T20 Use a conventional cost comparison and determine: (a) An equivalent annual cost comparison assuming infinite service need. Which one do you choose? Why? (b)...
Question 3 (1 point) Saved You were given three cost-reduction proposals in your lower tier textile operation AO denotes the do-nothing alternative. The required investments are $320.000 for A1. $550,000 for A2, and $820,000 for A3. If the MARR is 15%, what system should be selected? You already estimated rates of return for the three projects, along with some incremental rates of return: Incremental Rate of Return (%) 18% 20 Incremental Investment A - Ao A₂ - Ao Az -...
9- Two alternatives with identical benefits are being considered: 49 A B Initial cost $500 $800 Uniform annual cost 200 150 Useful life, in years 8 8 (a) Compute the payback period if Alt. B is purchased rather than Alt. A (b) Use a MARR of 10% and benefit-cost ratio analysis to identify the alternative that should be selected
ANSWER THE FOLLOWING QUESTIONS:-
Three mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are given. The interest rate is 20% per year. At the conclusion of the useful life, the investment will be sold A C Investment cost $28,000 $55,000 $13,000 $28,000 $8,000 $40,000 Annual expenses Annual revenues $15,000 $23,000 $6,000 10 years $22,000 $32,000 13 $10,000 Salvage value Useful life 10 years 10 years A decision-maker can select one of these alternatives or...
Three mutually exclusive investment alternatives are being considered. The estimated cash flows for each wernative we given below. The study period is 30 years and the firm's MARR is 6% per year. Assume repeatability and reinvestment of positive cash balances at 6 per year a. What is the simple payback period for Alternative 1? b. What is the annual worth of Alternative 2? c. What is the IRR of the incremental cash flows of Alternative 2 compared to Aheative 1?...
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