Dark Skies Observatory is considering several options to purchase a new deep-space telescope. Revenue would begenerated from the telescope by selling "time and use" slots to various researchers around the world. Four possibletelescopes have been identified in addition to the possibility of not buying a telescope if none are financially attractive.The table below details the characteristics of each telescope. An external rate of return analysis is to be performed usinga MARR of 25%.Useful LifeComparison 1:Comparison 2:Comparison 3:Comparison 4:First Cost10 years10 years 10 years$600,000 $800,000 $470,000Salvage Value$70,000 $130,000 $65,000 $200,000Annual Revenue $400,000 $600,000 $260,000 $320,000Annual Expenses $130,000 $270,000 $70,000 $120,000Which telescope (if any) is most financially attractive?T1ERR 1:Show the comparisons and external rates of return used to reach this decision:ERR 2:ERR 3:T2ERR 4:T3%%%T4%10 years$540,000Carry all interim calculations to 5 decimal places and then round your final answer to 1 decimal place. The tolerance is ±0.2.

The External Rate of Return (ERR) is a concept used in project evaluation and investment analysis,…

Answered: Dark Skies Observatory is considering…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Two numerically controlled drill presses are being considered by the production department of Zunni's Manufacturing; one must be selected. Comparison data is shown in the table below. MARR is 10%/year. Drill Press T Drill Press M Click here to access the TVM Factor Table Calculator Part a * Your answer is incorrect. Initial Investment Estimated Life Estimated Salvage Value Annual Operating Cost Annual Maintenance Cost What is the future worth of each drill press? Drill Press T: $ Drill Press M: $ 40000 60000 $20,000 10 years $5,000 $12,000 $2,000 $30,000 10 years $7,000 $6,000 $4,000 Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±20.
Bailey, Inc., is considering buying a new gang punch that would allow them to produce circuit boards more efficiently. The punch has a first cost of $100,000 and a useful life of 15 years. At the end of its useful life, the punch has no salvage value. Labor costs would increase $2,000 per year using the gang punch, but raw material costs would decrease $12,000 per year. MARR is 5 %/year. Part a Your answer is incorrect. What is the discounted payback period for this investment? 7893 years Carry all interim calculations to 5 decimal places and then round your final answer to the nearest year. The tolerance is ±1.
Empire Limited is trying to decide between two machines which are necessary in their manufacturing facility. Data concerning the two machines are presented below. If the company has a minimum attractive rate of return (MARR) of 10%, which machine should be chosen? Use co-terminated assumption (5 years) and compare using Present Worth Method. Note: Show final answer to the nearest WHOLE NUMBER Answer the following: a. The Present Worth of Alternative A is = $ Blank 1 b. The Present Worth of Alternative B is = $ Blank 2 c. Choose Alternative (Type only A or B) = Blank 3
One of the mutually exclusive alternatives below must be selected. Base your recommendation on A(Sauer-Glock) cash flows when the MARR = 8% per year. Q Q 0 P ΕΟΥ 5 3P Glock 40 The IRR on A(Sauer-Glock) is 9.11%. (Round to two decimal places.) 5 SIIS 0 3P ΕΟΥ 5 Sauer 45 P/5 1 10
One of the mutually exclusive alternatives below must be selected. Base your recommendation on A(Sauer-Glock) cash flows when the MARR = 8% per year. Q Q Q 0 P ΕΟΥ 10 P Glock 40 The IRR on A(Sauer-Glock) is %. (Round to two decimal places.) 20 OU C 2P ΕΟΥ 10 Sauer 45 P/4 1 20
Two numerically controlled drill presses are being considered by the production department of Zunni's Manufacturing; one must be selected. Comparison data is shown in the table below. MARR is 10%/year. Drill Press T Drill Press M Click here to access the TVM Factor Table Calculator Part a Initial Investment Estimated Life Estimated Salvage Value Annual Operating Cost Annual Maintenance Cost What is the future worth of each drill press? Drill Press T: $ Drill Press M: $ $20,000 10 years $5,000 $12,000 $2,000 $30,000 10 years $7,000 $6,000 $4,000 Carry all interim calculations to 5 decimal places and then round your final answer to the nearest dollar. The tolerance is ±20.
We are buying a machine for cleaning up the seawater which is contaminated with oil spill. Compare the following three alternatives by adopting the incremental ROR analysis when MARR = 10%. Use PW method after you calculate the incremental values. Which one should we select? 7,8 Machine 1 Machine 2 First cost, $ Annual operating cost, $ Life, years Machine 3 -5,000 -3,000 5 -6,500 -2,500 5 -8,500 -2,000 20 సబం లణంం
A machine costs $15000 and has a maintenance cost $1000 per year and a salvage value of $2500 after three years. The life cycle cost of the machine ?MARR =10%Explain each step for used formulas.
Company X is considering the purchase of a helicopter for connecting services between their base airport and the new inter-county airport being built about 30 miles away. It is believed that the chopper will be needed only for 6 years until the Rapid Transit Connection is phased in. The estimates on two types of helicopters under consideration, The Whirl 2 B and The ROT 8, are given below: The Whirl 2 B First Cost Annual Maintenance Salvage Value Useful life in years $95,000 $3,000 $12,000 The ROT 8 $120,000 $9,000 $25,000 6 3 Assuming that the Whirl 2B will be available in the future with identical costs, what is the annual cost advantage of selecting The Whirl 2B ? (Use an interest rate of 10 %) A. cost more than $4,000 C. cost between $4,000 and $3,000 B. save between $3,000 and $2000 D. save more than $4,000
Solve with complete solution and draw the cash flow diagram A new municipal refuse-collection truck can be purchased for $84,000. Its expected useful life is six years, at which time its market value will be zero. Annual receipts less expenses will be approximately $20,000 per year over the six-year study period. If MARR of 18% determine whether this is a good investment. a) Use the PW method. PW = $___ b) Determine the Simple Payback Period. ___years Note: For equivalent worth, round off the final answer to whole number. For Rate of Return, round off to two decimal places (in percentage)
Mary, a project manager for ABC Ic., is reviewing a product quality improvement project. She has determined that the project's Annual Worth of $3,396. for a period of 8 years. She now has to calculate the IRR for the project but unfortunately she has lost some information about the cash flows. She knows only that the project has: a 8-year project life with an initial cost of $400,000. a set of equal revenue cash flows occurred at the end of each year for 8 years, and • MARR used for calculation the Annual Worth was 8%. Find the annual revenue first and then calculate the IRR for the project = ? O 14% < IRR (i*) < 15% O 13% < IRR (i*) < 14% O 10% < IRR (i*) < 11% O 9% < IRR (i*) < 10% O 8% < IRR (i*) < 9%
Solve with complete solution and draw the cash flow diagram A new municipal refuse-collection truck can be purchased for $84,000. Its expected useful life is six years, at which time its market value will be zero. Annual receipts less expenses will be approximately $20,000 per year over the six-year study period. If MARR of 18% determine whether this is a good investment. a) Use the PW method. PW = $___ b) Determine the Simple Payback Period. ___years

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