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- Economics If a 5% interest rate is used, which of the three proposed plans should be adopted? Evaluate these mutually exclusive alternatives with a horizon of 20 years and a MARR of 15%. A B Initial investment $9500 $18,500 $22,000 Annual savings 3200 5,000 9,800 Annual costs 1000 2,750 6,400 Salvage value 6000 4,200 14,000 Use each of these approaches: (a) Conventional B/C ratio (b) Modified B/C ratio (c) Present worth analysis (d) Internal rate of return analysis (e) Payback periodPlease no written by hand and no emage Solve in excel Carp, Inc. wants to evaluate two machines for packaging their products.Machine A:Initial cost is $700,001st year O&M cost is 18,000; this cost increases $900 each year.The annual benefits are $154,000It can be sold at the end of 10 years useful life for $145,000 Machine B:Initial cost is $1,600,001st year O&M cost is 28,000; this cost increases $650 each year.The annual benefits are $300,000It can be sold at the end of 20 years useful life for $210,000The companies uses an interest rate of 15% Use annual cash flow analysis to decide which is the most desirable alternative.Determine which of the following three alternatives is most efficient and which one is more profitable using the incremental benefit/cost method. The rate is 5% per year. Annual Benefits $/yr Alter. Construction cost $ Salvage $ Life (yrs) $450,000 $1,100,000 $750,000 $320,000 $360,000 $330,000 A $40,000 $100,000 -20,000 10 B. 15 13
- rate 4.5% 1. Compare the following 2 alternatives using the EUA method. The benefits are the same and can be ignored. Alt. A B Manufact. cost $ 1,500 3,300 Salvage value $ -200 +300 Service Life (yrs) 4 7Question 6 An engineering company is considering the purchase of one of the following three equipment. The useful life of each alternative is 10 years and the interest rate is 8%. 97552 7550 2158 8162 1550 $135,000 $3,000 $35,750 $59,450 Initial cost 4045 19797 Annual costs Annual benefits Salvage value after 10 years 4517 The incremental benefit-cont ratio of B-A is closeat to: Notes: • Consider the salvage value as benefit. . Round your answer to the nearest three decimal places (ex: 1.374).For this question, use the following information: A В D E Initi al Investment -3,300 -6,500 -5,000 -8,000 -4,000 Annual Benefit 700 1,200 900 1,400 850 Salvage Value 100 400 300 1,000 200 Useful life 10 10 10 10 10 IRR 16.85% 13.49% 12.86% 12.67% 17.01% E-A C-A В-А D-A D-B Delta IRR 17.74% 4.63% 9.92% 9.76% 9.47% С-Е В-Е D-E В-С D-C Delta IRR -7.43% 7.50% 8.31% 15.52% 12.38% Which alternate should be selected if MARR is 9% (mutually exclusive)?
- Fitzgerald, Ivy, Garcia, Nichols, Eudy, Williams, Thomas, Owens, and Nagy (FIGNEWTON) Inc. must replace its fig - crushing equipment. The alternatives under consideration are presented below. Alternative First Cost Net Annual Benefits Useful Life A $170, 500 $14, 675 5 years B 205,000 17,000 7 years C 242,500 16, 350 8 years D 290,000 14,825 10 years a) Which anlaysis method should be used to select the alternative? b) Why should that analysis method be used? c) if FIGNEWTON uses a MARR of 8%, what alternative should be chosen? d) if FIGNEWTON uses a MARR of 18%, what alternative should be chosen? Submit one excel file with answers a), b), c) and d) highlighted clearly.4. Consider four mutually exclusive alternatives: Initial Cost, $ A $770.00 Uniform annual benefit, $ per 420.00 year B 1406.30 830.00 с 4 2563.30 1600.00 D 8 0 Useful life, years 2 The analysis period is 8 years. At the end of 2, 4, and 6 years, Alt. A will have an identical replacement. Alternative B will have a single identical replacement at the end of 4 years. Choose the best alternative using incremental ROR analysis with MARR = 7%. 0 0Baguio Rabbitry must replace the piping system in its barn. Based on cost of capital of 12% which of the two following alternatives should be chosen using the following methods? a) RORAI b) AW c) PW Pamper pipes P 75,000 Fluid Flush P 90,000 First Cost Operating costs per 5,000 4,000 year Savings per year Salvage value 1,000 2,000 2,000 Useful life 10 10
- 5 a. What is the payback period (Be exact to 1 decimal place) of the cash flow below? (I am attaching an image for the figure)5 b. A project has the following costs and benefits. What is the payback period (Be exact to 1 decimal place)? Year Cost Benefits0 300001-3 15,000 each year 12,000 each year4 7000 30005-10 11,000 each yearEngineering economy - ENGR 3322 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 $18,000 per year over the six-year study period. At MARR of 19%, calculate the benefit-cost ratio of the project a. 53 b. 63 c. 73 d. None of the choicesFIRST COST ANNUAL COST SALVAGE VALUE ANNUAL INTEREST RATE STUDY PERIOD Power Line 20,000 1,950.90/month × 12= 23,410.8/year Solar 25,000 × 7= 125,000+10,000= 135,000 3,000 0 1.5% 25 0 3.5% 25 ALTERNATIVE A: A solar panel costs 25,000. 7 solar panels are needed in a company. The installation fee is 10,000 and will have a useful 25 years with no salvage value. The maintenance per year is 5,000. The annual interest rate for solar panel is 2%. ALTERNATIVE B: A new power line will cost 20,000, with power costs expected to be 1,950.90 per month. Th annual increase rate of electric bill is about 3.5%. Which alternative should be selected on the basis of a future worth analysis? Illustrate the cash flow diagram. USE MS EXCEL IN COMPUTATION and SHOW THE SOLUTION PROPERLY.