Given the data in the table below, choose the better alternative using net present value (NPV) analysis if MARR is 8%. Alternative A B. Initial Cost $20,000 $8.000 Annual Benefits $8,200 $4,700 Annual Expenses $3,500 $1,500 Salvage Value $2,000 $3.000 Useful Life in Years 8. 4.
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- Two alternatives are being considered. If the MARR is 7% which alternative should be chosen using the incremental internal rate of return? Item A B First Cost $9,200 $5,000 Uniform Annual Benefit 1,850 1,750 Useful Life 8 4Which alternative should be selected using the incremental rate of return analysis, if MARR =11.0%? Do- nothing A B C D First Cost 0 $10,000 $4000 $10,000 $7000 Annual benefit 0 1,806 828 1,880 1,067 Life 10 Years ROR 12.5% 16.0% 13.5% 8.5% a. B, because its ROR is the highest b. Something other than C, because C costs the most initially c. C, because the C-B increment has a ROR of 11.78% and the A-B increment has a ROR of 10.5% d. C because C has the highest annual benefitWhich alternative should be selected using incremental rate of return analysis, if MARR = 12.0%? First cost Annual benefit Life ROR Do-nothing 0 10 yrs A B $6,500 $3,500 1,246 765 с D $7,500 $5,000 1,523 779 14.0% 17.5% 15.5% 9.0% B, because its ROR is the highest something other than C, because C costs the most initially C because C has the highest annual benefit C, because the C-B increment has a ROR of 13.70% and the A-B increment has a ROR of 9.66%
- Given the financial data in the table below for two mutually exclusive alternatives, determine the value "X" for the two alternatives to be equally attractive. Use an interest rate of 12% per year. Q Initial cost $2,500 $4,000 Annual benefit 400 LifeEvaluate the two alternatives A and B and decide the economic justified alternative using: Present worth method, Annual worth method, Future worth method I.R.R method E.R.R Method , E.R.R.R method M.A.R.R = 15%, the details of alternatives are shown in the table below Alternatives A B Investments $120,000 $155,000 Useful life (years) 15 20 Annual disbursements $25,000 $35,000 Annual revenues $45,000 $60,000 Salvage values $25,000 $30,000Assuming that Alternatives B and C are replaced with identical units at the end of their useful lives, and an 8% interest rate, which alternative should be selected? Use an annual cash flow analysis. A B C cost $12,500 $15,000 $17,500 Annual benefit 1,500 3,500 2,500 useful life (yrs) 7 15
- 5. Compare the following two alternatives by the IRR method, given MARR of 6%/year. First find if they are feasible and then compare them with the incremental rate of return (AROR). Alt. Benefits S/yr Salvage S Service Life (ys) Construction cost $ 410,000 55,000 20,000 11 B 250,000 35,000 10,000 11Compare the following two alternatives by the IRR method, given MARR of 6%/year. First find if they are feasible and then compare them with the incremental rate of return (AROR). Alt. Construction cost $ Benefits $/yr Salvage $ Service Life (yrs) A 410,000 55,000 20,000 11 B 250,000 35,000 10,000 11Given the financial data for four mutually exclusive alternatives in the table below, determine the best alternative using the incremental rate of return (AROR) analysis. MARR =10%. A B D First cost $15,000 $21,200 $36,000 45,000 O &M Cost/ 1,600 700 400 1,000 year Benefit/year 8,000 9,000 13,000 15,000 Salvage value 3,000 4,600 6,000 10,000 Life in years 5
- 1. Given four different alternatives as shown in table below. Data В Initial Cost $10,000 $1,850 $18,000 $3,500 $25,000 $4,500 12.4% $30,000 $5,000 Annual Benefit IRR 13.1% 14.36% 10.56% Required: a) The best alternative using Incremental IRR, for a MARR of 11%, n=10 yrs. b) Use any method to determine how much longer than 10 years does your choice from part "a" remain as the best alternative (when does the choice for part "a" is no longer the best alternative)?Any suggestions? Thanks for the help! Given the data for three different alternatives in the table below, determine the best alternative using the incremental rate of return (∆RoR) analysis. MARR =9%. A B C First cost $15,000 $25,000 $20,000 O &M Cost/ year 1,600 400 900 Benefit/year 8,000 13,000 9,000 Salvage value 3,000 6,000 4,600 Life in years 4 4 4 1. The better alternative between the first increment is ________________. 2. The better alternative between the second increment is ___________________.Given the financial data for four mutually exclusive alternatives in the table below, determine the best alternative using the incremental rate of return (AROR) analysis. MARR = 10%. A B C D $15,000 $21,200 $36,000 45,000 1,600 700 400 1,000 First cost O &M Cost/ year Benefit/year 8,000 9,000 13,000 Salvage value 3,000 4,600 6,000 Life in years 4 15,000 10,000
