Question

dt Moving to another question will save this response. Question Question 12 15 points For alternatives shown n the table below you are trying to decide which alternative you should choose based on their capitalized costs use an interest rate of 10% per year Machine A Machine B First cost (AED) Ansual maintenance cost per year, AFD 5000 20,000 240,000 2,300 Periodic cost every 10 years,AED 10,000 Salvage cost 2000 Lide, years Match the closest correct answers for the below questions: :Calculate the present value of the maintenance costs for Alternative B A Alternative A B·[44483.501 C. 1-269,275 D. I Altemative B E. 1-627.5 (-1.3001 G. I-253,627.50 Calculate the Anuual value of the periodic costs for Alternative B Calculate ㏄ of Alternative B #Calcuide the CC of Alternative A Which ahernative should be selected? L. 1-108,784) susi amton 12 of 15 るBlackboard Question 13 15 The two ME altermnatives shown are under consideration for faclity improvements i rate of 10% per year and a 5year study period. in Abu Dhabl Determine which one should be selected based on a B/C analysis Assumea i in a company Alternative X AlternativeY First costs, AED 0,000 90,000 Annual M&0 costs, AED per year 50,000 20,000 Benefits, AED per year 120,009 Disbenefits, AED per year 10,000 Match the closest comect answers for the below questions: 2 What is the total annual cost of Aternative X? A JAED 43,742 B. JAiternative Y What is the total annual cost of Aternative Y? a Wnat isthe BIC ratio of Atenative X7 G. IDO NOTHING (N What is the B/ C ratio of Alternative Y? What is the incremental B/C (AB/C) ratio between the two alternatives, X and Y? Which abernative, if any, should be chosen? E1.49 F. 3.2 G AED 60,552 H. (AED 23,742 L [AED 10,552 Question 14 Ahmed's Company manufactures and sells one product. The product has the following cost and revenue Selling price Per Usit (AED) Variable cost Per Unit (AED) 70 25 Total fixed expenses per month are as follows: Expenses types Advertising Rent AED 200,000 100,000 Heating 100,000 The company produced and sold 10,000 units during the month and had no beginning or ending inventories. Match the closest correct answers for the below questions: に:What is the break-even point in dirhams? A. IAED 30,000 How many units would the company have to sell to have a profit of AED120,0007 B. I AED 110,000) If the sales increase by 200 units, by how much should the net operating income (protit C. [10,800 UNITS D. [AED 400,000 E. [12.000 UNITS F [11,556 UNITS G. 140,000 UNITS) H. (AED 9,000] ,AED 622222] し J. IAED 50,000

Answer 1

		ANALYSIS OF MACHINE A:
	N	Year	0	1	2	3	4
	A	First cost	20,000
	B	Annual maintenance cost		5,000	5,000	5,000	5,000
	C	Salvage Cost					-2000
	D=A+B+C	Net Cost	20,000	5,000	5,000	5,000	3,000	SUM
	E=D/(1.1^N)	Present Value of Net Cost	20,000	4545	4132	3757	2049	34,483
		(Discount Rate=10%=0.1)
		Present Value of Cost	34,483
		Equivalent Annual Cost	10,878	(Using PMT function of Excelwith Rate=10%, Nper=4, Pv=-34483)
		Excel Command: PMT(10%,4,-34483)
		ANALYSIS OF MACHINE B:
	A	First Cost	240,000
	B	Present Value of annual maintenance cost	23000	(2300/0.1)
	C	Periodic Cost every 10 years	10000
	D	Discount Rate for 10 years=(1.1^10)-1	159%
	E	Present Value of Periodic   Cost	6,275	(10000/1.59)
	F=A+B+E	Present Value of Total Cost	269,275
		Equivalent annual cost	26,927	(269275*0.1)
		Alternative A Should be selected