![4. [9pts] Your company is considering two mutually exclusive alternatives for an improvement project. Do nothing is an option](http://img.homeworklib.com/questions/26921be0-0940-11ea-887a-f1f5cc03edf5.png?x-oss-process=image/resize,w_560)
Homework Answers
EUAW of option A = -100000 * (A/P, 15%,4) + 40000
= -100000 * 0.350265 + 40000
= 4973.46
EUAW of option B = -150000 * (A/P, 15%,5) + 25000 * (A/F, 15%,5) + 50000 - 4000 * (A/G, 15%,5)
= -150000 * 0.298316 + 25000 * 0.148316 + 50000 - 4000 * 1.722815
= 2069.30
As EUAW of A is more, it should be selected
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4. [9pts] Your company is considering two mutually exclusive alternatives for an improvement project. Do nothing is...
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4. (10 points) A firm is considering three mutually exclusive alternatives as part of a production improvement program. The alternatives are: Initial Cost $20,000 $30,000 $50,000 Uniform Annual Benefit $4,000 $5,000 $6,500 Useful Life Salvage Value $2,000 $9,000 The MARR is 10%. Which alternative do you recommend? Be sure to use the proper technique when comparing alternatives with different useful lives.
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The AW of Alternative A is?
The AW of Alternative B is?
Two mutually exclusive alternatives are being considered. The MARR is 15% per year. General inflation is 4.5% / year Based on the data below, perform an appropriate analysis to select the most economical alternative. Assume that the market value grows at the general inflation rate. Alternative A Alternative B 51700D5240,000 Initial investment Annual revenue (actual $) $43,000 $48,000 $3,000 in year 1 increasing by $300 each...
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2) Two mutually exclusive design alternatives are being considered, with each one having a useful life of 10 years. The estimated sales and cost data for each alternative are shown. Annual revenues are based on the number of units sold and the selling price. Annual expenses are based on the fixed and variable costs. If the MARR is 20% per year, determine which alternative is preferable based on the PW Method. 12 Investment cost Units to be sold each year...
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