do fast. יו.MARR = 10%. Your consultancy business signs on with a new client. The client pays you $2000 as deposittoward future work. Two years later, you invest labour hours valued at $1000. The following year you investan additional $7000. The following year, you receive the contract's remaining balance of $6500. Theproject's approximate ERR is between13-14%14-15%15-16%16-17%None of the above-"I---II-||I2-----Ef.

The objective of the question is to calculate the approximate External Rate of Return (ERR) for a…

Answered: יו. MARR = 10%. Your consultancy…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Triple J Construction Firm had put up for sale of some of their heavy equipmentfor construction works. There were two interested buyers submitting their respective bidsfor the heavy equipment. The bids are as follows:Buyer A offers P10,000,000 payable 20% down payment, the balance payable P1,000,000annually for 8 years.Buyer B offers P9,000,000 payable P2,000,000 down payment, the balance payableP500,000 semi-annually for 7 years.How much is the difference between the two bids if money is worth 10% effective?ANSWER: P347,733.29
An electronics firm is planning to manutacture a new handheid gaming device tor the preteen market The data have been estimated tor the product Assuming a negligible market (salvage) value tor the equipment at the end of tive years, determine the breakeven annual sales volume for this product. E Click the icon to view the data estimated for the product A Click the icon to view the interest and annuity table for discrete compounding when i= 15% per year. The breakeven annual sales volume is 5000 units. (Round to the nearest whole number) More Info Sales price $12.50 per unit Equipment cost Ovorhoad cost Operating and maintenance cost Production lime per 1,000 units Study period (planning horizon) $200,000 $50.000 per yoar $25 per operating hour 100 hours 5 years 15% per year MARR
A continuous improvement team has helped to save $20,000 for the company on a process that will not be changed for the next 10 years. If the team has spent $50,000 on the improvement project, the net present worth (NPW) of savings on this improvement project is $150,000 at a MARR of 5%. O True O False
Q19 solutio n neded
Calculate the annual worth uniform series in years 1 through 10 for the following incomes and expenses, If the interest rate is 1596 per year. Expense, S/Year 10,000 2,000 Year Income, S/Y ear 1-6 7,000 7-10 1,000 2,000 Selected Answer: 3 [None Given] Correct Answer: $1,532
Incorrect Question 8 When calculating the Break Even Analysis, one needs to subtract the FW of the cash inflows from the PW of the cash outflows. True False
A project requires an initial investment of 47,000 dollars. The instream cashflow is 800 dollars per year. The time value of money is 4.58 percent. Compute the payback period. Note: Please don't divide 47000/800 and post that answer. That is not the correct solution, we need to use 4.58 percent too to get the solution.
Conduct a ROR analysis for the above information. If MARR= 18%, which project should be chosen and what is its corresponding ROR Investment cost Annual maintenance cost Salvage value Project A 20,000 2,000 5,000 Useful life (years) 20 O Project B, ROR - 19.69% Project A, ROR=20.69% O Project B, ROR=20.69% Project A, ROR = 19.69% Project B 10,000 4,000 1,000 20
Eddie’s Precision Machine Shop is insured for $700,000. The present yearly insurance premium is $1.00 per $100 of coverage. A sprinkler system with an estimated life of 20 years and no salvage value can be installed for $20,000. Annual maintenance costs for the sprinkler system are $400. Ifthe sprinkler system is installed, the system must be included in the shop’svalue for insurance purposes but the insurance premium will reduce to $0.40 per $100 of coverage. Eddie uses a MARR of 15%/yr. Solve, a. What is the internal rate of return of this investment? b. What is the decision rule for judging the attractiveness of investments based on internal rate of return? c. Is the sprinkler system economically justified?
Chambers Company has just gathered estimates forconducting a break-even analysis for a new product.Variable costs are $7 a unit. The additional plant willcost $48,000. The new product will be charged $18,000a year for its share of general overhead. Advertisingexpenditures will be $80,000, and $55,000 will be spenton distribution. If the product sells for $12, what is thebreak even point in units? What is the break even pointin dollar sales volume?
If APC is constant, C and Yshould also be constant. True or False
The Gigadigit Manufacturing Inc. is considering to produce a new product. The following data have been provided to management: Sales price S17.50/unit Equipment cost S250,000 Incremental overhead cost |550,000/year Sales and marketing cost $150,000/year Operating and maintenance cost $25/operating hour Production time/1,000 units 100 hours Packaging and shipping cost s0.50/unit Planning horizon Minimum attractive rate of return 15% 5 years The managers would like to know the viability of this product and how it would roll out in sales. (a) To give them basis and insight what is the break-even value of units that must be sold annually to keep the product viable? (b) If the target revenue is from 30,000 units sold, what is the expected profit? (C) If the profit drops by 13% due to equipment replacement, how much must have been the cost of the alternative equipment? (d) Provide graph for (a)

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