Assuming a firm’s weighted average cost of capital is 12%, what is the discounted payback period of the following project? Year Net Cash Flow 0 -$375,000 1 $200,000 2 $200,000 3 $350,000 Group of answer choices a. 2.40 years b. 2.15 years c. 2.21 years d. 1.88 years
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- kuzukuzu12121@outlook.com just sent here I NEED EXCEL FİLE. Determine the NPW, AW, FW and IRR of the following engineering project. Initial Cost ($400,000) The Study Period 15 years Salvage (Market) Value of the project 15% of the initial cost Operating Costs in the first year($9,000) Cost Increase 3% per year Benefits in the first year $40,000 Benefit Increase 9% per year MARR 8% per year Is the Project acceptable? WHY?15. You want to open a new business but for the first 3 years you wont make any income as it takes time for the paperwork and approvals to process. After your business is up and running, you will make $75,000 per year forever. What is the capitalized cost of the income at 8% per year? What does the capitalized cost represent in layman terms?What does the term engineering economic decision refer to in all investment decisions relating to an engineering project?
- Question 1 A design firm is considering multiple independent projects for the upcoming quarter. For a MARR of 6.5% per quarter. What is your recommendation to the company based on a PW analysis? Project Initial Payment Monthly Costs (Today) A $1,500,000 $170,000 B $245,000 $200,000 C $300,000 $150,000 Payments are inflows for the design firm. Costs are outflows for the design firm. Payment at month 12 of $1,000,000 Costs at month 9 of $100,000 None Final Payment (At end of project) $3,000,000 Project Length Other Cash flows 2 years $3,000,000 18 months $4,000,000 30 monthsWhat is FW of Design A, Design B, and Design C. Which alternative should be chosen. Do not round off in the solution.It refers to the number of years that the original capital investment for the project will take to be paid by its annual earnings O A. Profitability Index O B. Payback Period O C. Rate of Return O D. MARR
- You have been asked to perform an economic evaluation of two projects and recommend one of them for implementation. The project parameters are as follows: Project A Project B Discount Rate 4.0% 4.0% Your analysis concludes that: Project Cost $1,000,000 $750,000 Project Life (yrs) 10 15 Elec. Savings Elec. Cost (kWh/yr) ($/kWh) 800,000 600,000 O Project A is preferable, but Project B also has attractive performance. O Project B is preferable, but Project A also has attractive performance. O Project B is preferable and Project A results in a net loss. O Project A is preferable and Project B results in a net loss. $0.12 $0.12 Annual Cost Escalation Rate 1.5% 1.5%You are considering an open-pit mining operation. The cash flow pattern issomewhat unusual since you must invest in some mining equipment, conductoperations for two years, and then restore the sites to their original condition.You estimate the net cash flows to be as follows: N Cash flow 0 -$1,600,0001 1,500,0002 1,500,0003 -700,000 What is the approximate rate of return of this investment?(a) 25%(b)38%(c) 42%(d)62%1. The Present Worth Method A project your firm is considering for implementation has these estimated costs and revenues: an investment cost of $50,000; maintenance costs that start at $5,000 at the end of year (EOY) 1 and increase by $1,000 for each of the next 4 years, and then remain constant for the following 5 years; savings of $20,000 per year (EOY 1–10); and finally a resale value of $35,000 at the EOY 10. If the project has a 10-year life and the firm’s MARR is 10% per year, what is the present worth of the project? Is it a sound investment opportunity?
- A business owner is comparing between three alternatives (A, B, and C) for their new project. A. Buy a new equipment with an initial cost of $120,000; annual operating cost of $7000; and salvage value of $5000. B. Buy a new equipment with an initial cost of $105,000; annual operating cost of $10500; and salvage value of $7000. C. Continue using the same equipment they already have with an annual operating cost of $25,000. Life of all alternatives is 12 years. With interest at 8% compounded annually, which alternative should the engineer recommend? Use future worth analysis.(a) You are trying to decide the plant size for a new chemical production process. By considering three alternative plant sizes, estimate the minimum plant size to achieve a 14% Discounted Cash Flow rate of return using the data given in TABLE Q2 (When choosing alternative plant sizes, it is suggested to use +50,000 t y') TABLE Q2 Current capital cost of a 100 000 t y1 plant Construction time €160 million 1 Net income Plant life Plant scale factor year 400 € per tonne 5 years 0.67With interest at 10%, what is the benefit-cost ratio for this government project? Initial Cost Additional costs at the end of year 1 and year 2 Benefits at end of year 1 and year 2 Annual benefits at end of year 3 through year 2 Enter your answer as follow 12.34 $208,355 $23,720/year $0Ayear $91.825/year