Given the following two alternatives and using the repeatabilityassumption and MARR=15%/year, the equation for computing thepresent worth of vendor B isVendor AFirst Cost, $-15,000Annual cost, $ per year -3500Salvage Value, $1000Life, years3Vendor B-18000-310020004OPW=18000-18000(P/F,15%, 4)-18000(P/F,15%, 8)+2000(P/F, 15%,4)+2000(P/F, 15%, 8) +2000 (P/F, 15%, 12)-3100(P/A, 15%, 12)PW=18000-18000(P/F, 15%, 12)+2000(P/F, 15%, 4)+2000 (P/F, 15%,8)+2000(P/F, 15%, 12)-3100(P/A, 15%, 12)O PW=-18000-18000(P/F,15%, 4) - 18000(P/F,15%, 8) +2000(P/F, 15%,4)+2000(P/F, 15%, 8) +2000 (P/F, 15%, 12)-3100(P/A, 15%, 12)O PW=-18000(P/F,15%, 4) -18000(P/F,15%, 8) +2000(P/F, 15%, 4)+2000(P/F,15%, 8) +2000(P/F, 15%, 12)-3100(P/A, 15%, 12)

Present Worth refers to the value that a certain investment or scheme in the future has at present…

Answered: Given the following two alternatives…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

An environmental engineer is considering three methods for disposing of a non-hazardous chemical sludge: land application, fluidized-bed incineration, and private disposal contract. The estimates for each method are below. Determine the equivalent present worth value of the LAND APPLICATION using its AW value based on 10% per year. Refer to table 2 for additional information. Table 2 Land Application Inciner- ation Contract Firg cost, S -150.000 -a00 000 Annual cost, Syear -95.000 -60,000 -170,000 Salvage value, S Life, years 25.000 300,000 4. 6. O $1,158,329 O $-1,158,329 O $933,027 O $-933,027 O No correct answer
A company that manufactures magnetic membrane switches is investigating two production options that have the estimated cash flows shown ($1 million units). Which one should be selected on the basis of a present worth analysis at 10% per year? In-house Contract First Cost, $ -30 Annual Cost, $ per year -5 -2 Annual Income, $ per year 14 3.1 Salvage Value, $ 2 Life. years 5 Approximately, what is the value of (P) if A-340, n=9 years, and i= 8% per year? O a. 2847 O b. 2549 O c. 1763 O d. 2124
Calculate the total capital cost and the annual worth for the following cash flow diagram (the time is infinity) 2 4 8 10 12 14 20 26 Year Infinity $2000 $3000 S50,000 $1500 $1500 $1500 Only one рayment Cost repeated every 7 years i = 5% per year $90,000
A buyer placed an initial order with a supplier named Ronco that makes brake assenblies. The order was for 100 pieces at a per-unit price of $281. The buyer collected the following costs from Ronco: Direct Matevial Costs $100/mit Direct Labor Costs $50/unit (5 hours/unit at $10/hour labor rate Overhead Costs $75/anit Icalculated at 150% of direct labor) Total Costs of Goods Sold $225/unit Seller's Profit (25% of total $56 cost makup Total price per unit $281 At 200 units, what should the buyer erpect to pay for these units whon factoring in a 20 productivity ienprovenent deaning atai O Not enou Information avalable O 1250un O $266.75nic
A company that manufactures magnetic membrane switches is investigating two production options that have the estimated cash flows shown ($1 million units) in Table below. Which one should be selected on the basis of Present Worth (PW) analysis at 10% per year? In-house Contract First cost, $ Annual cost, $ Annual income, $ per year Salvage value, $ Life, years -30 per year -5 -2 14 3.1 10% TABLE 15 Discrete Cash Flow: Compound Interest Factors 10% Single Payments Uniform Series Payments Arithmetic Gradients Compound Present Worth Sinking Fund Compound Capital Recovery A/P Present Gradient Gradient Amount Amount Worth Present Worth Uniform Series F/P P/F A/F F/A P/A P/G A/G 1 1.1000 0.9091 1.00000 1.0000 1.10000 0.9091 1.2100 0.8264 0.47619 2.1000 0.57619 1.7355 0.8264 0.4762 3 1.3310 0.7513 0.30211 3.3100 0.40211 2.4869 2.3291 0.9366 4 1.4641 0.6830 0.21547 4.6410 0.31547 3.1699 4.3781 1.3812 0.6209 0.5645 0.5132 1.6105 0.16380 6.1051 0.26380 3.7908 6.8618 1.8101 6 1.7716 0.12961…
The fixed costs at Harley Motors are $1million annually. The main product hasrevenue of $8.50 per unit and $4.25 variablecost. Determine the following.(a) Breakeven quantity per year.(b) Annual profit if 200,000 units are soldand if 350,000 units are sold. 2. For the estimates below, calculate thefollowing.(a) Breakeven quantity per month.(b) Profit (loss) per unit at sales levelsthat are 10% above and 10% belowbreakeven.r = $39.95 per unit v = $24.75 per unitFC =$4,000,000 per year
Street lighting fixtures and their sodium vapor bulbs for a two-block area of a large city need to be installed at a first cost (investment cost) of $130,000. Annual maintenance expenses are expected to be$6,500for the first8years and$8,500 each year thereafter upto 25years. With an interest rate of 9% per year, what is the present worth cost of this project? Choose the closest answer below. A) $202,422 B $238,597 C) $249,468 D) $277,339
Net present value:a) is greater if cash receipts occur later rather than earlier.b) is greater if cash receipts occur earlier rather than later.c) is revenue minus fixed cost.d) is preferred over break-even analysis.e) is greater if $100 monthly payments are received in alump sum ($1,200) at the end of the year.
Identify the net cash flows shown below as either conventional or nonconventional. Year 0 1 2 3 4 5 (a) 400 300 200 100 0 −100 (b) −50 −50 −50 40 40 40 (c) −1000 200 300 400 300 200 (d) −6000 −500 −500 −750 10,000 −2000 (e) 50 −10 50 50 50 50
The fixed cost at Sonny Motors is $5765764 annually. The main product has revenue of $84 per unit and #43 variable cost. Then the annual profit if 285163 units are sold is
Problem 2: Select one of the following two plans using the present worth method. Given i= 20% per year. 1st Cost ($) Life (years) Salvage value ($) Annual Cost ($) Plan 1 25,000 10 5,000 6,000 Plan 2 50,000 20 0 2,500
a)Your company seeks to take over Good Deal Company. Your company’s offer for Good Deal is $3,000,000 in cash upon signing the agreement followed by 10 annual payments of $300,000 starting one year later. The time value of money is 10%. Find the present worth of your company’s offer. b)Please do the Sensitivity analysis and find how sensitive the present worth to initial cash upon signing, amount of payments, their frequency and rate of return

SEE MORE QUESTIONS

Recommended textbooks for you

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

ENGR.ECONOMIC ANALYSIS

Economics

ISBN:

9780190931919

Author:

NEWNAN

Publisher:

Oxford University Press

Principles of Economics (12th Edition)

Economics

ISBN:

9780134078779

Author:

Karl E. Case, Ray C. Fair, Sharon E. Oster

Publisher:

PEARSON

Engineering Economy (17th Edition)

Economics

ISBN:

9780134870069

Author:

William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

Publisher:

PEARSON

Principles of Economics (MindTap Course List)

Economics

ISBN:

9781305585126

Author:

N. Gregory Mankiw

Publisher:

Cengage Learning

Managerial Economics: A Problem Solving Approach

Economics

ISBN:

9781337106665

Author:

Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:

Cengage Learning

Managerial Economics & Business Strategy (Mcgraw-…

Economics

ISBN:

9781259290619

Author:

Michael Baye, Jeff Prince

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS