Calculate the benefit-cost ratio with a 10-year useful life, and a 25% MARR, and determine which of the following mutually exclusive alternatives should be selected. A B C D E Cost $100 $200 $300 $400 $500 Annual benefit 37 60 83 137 150 O a. Recommendation: Option A. With B/C₂ = 1.32, B/C -1.07. 8/C=0.99, B/C = 1.22, B/C = 1.07 Ob. Recommendation: Option D. With B/CA 1.32. B/CB 1:07, B/Cc = 0.99, B/CD 1.22, B/C 1.07 OC Recommendation: Option E. With B/C = 1.32, 8/C= 107, 8/Cc - 0.99. B/Cp - 1:22. B/C 1.07 Od Recommendation: Option B. With B/CA 1.32, B/C 1.07, B/Cc - 0.99, B/Cp 1.22. B/C- 1.07
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- Would love some help on how to approach this - thanks! The cash flows for three different alternatives are given in table below. MARR =10%. Alt. A Alt. B Alt. C Initial cost $5,000 9,000 7,500 Annual benefits $1,457 2,518 2,133 RoR 14% 13% 12.4% Life in years 5 1. ΔRoR for the first increment (Alt. C-Alt. A) is ___________________. A.10.12% B. 9.38% C. 11.85% D. 11.00% 2. ΔRoR for the second increment is ___________________. A. 10.12% B. 9.38% C. 8.94% D. 9.87% 3. The best alternative for a MARR of 10% using the incremental rate of return analysis is ____________. A. Alt. C B. Alt. A C. Alt. B D. Do nothingEach of the three mutually exclusive alternatives shown has a 5-year useful life. If the MARR is 10%, which alternative should be selected? Solve the problem by benefit-cost ratio analysis. A B Cost Uniform annual benefit $600.0 158.3 $500.0 138.7 с $200.0 58.3A major equipment purchase is being considered by Metro Atlanta. The initial cost is determined to be $1,000,000. It is estimated that this new equipment will save $100,000 the first year and increase gradually by $50,000 every year for the next 6 years. MARR=10% a. Using Benefit- Cost analysis, what is the Benefit/Cost ratio for this equipment purchase? b. Based on the Benefit/Cost analysis should Metro Atlanta purchase the equipment?
- Any help would be appreciated! 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 ________________. A. Alt. A or Alt. B B. Alt. A C. Alt.C D. Alt. B 2. The better alternative between the second increment is ___________________. A. Alt. B or Alt. C B. Alt. B C. Alt. C D. Alt. AGiven 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 Group of answer choices Cannot determine Alterative A Alterative B Alterative CThe cash flows for three mutually exclusive alternatives are given in table below. MARR = 4%. Alt A $15,000 $4,500 15% Initial cost Annual benefits ROR Life in years Reference Case Study 8 Alt B 27,000 7,600 13% 5 Alt C 24,000 6,500 11% Determine the AROR for the second increment (Alt. B- Alt.A) if A was retained during the first incremental analysis. OA.5.78% B. 10.85% O C.9.19% OD.8 12% 4
- Three independent alternatives are given below. If MARR is 18%, what is your decision? A B C Initial Cost $4.50 $1.90 $1.20 Annual Revenues $4.00 $2.50 $3.00 Salvage Value $0.50 $0.90 $0.00 Annual Operating & Maintenance Costs $1.20 $1.90 $2.70 Estimated life, in years 3 InfiniteEvaluate 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 Investments $6,000 $7,500 Useful life (years) 10 Annual disbursements $2,500 $3,500 Annual revenues $4,500 $6,000 Salvage values $500 $1,000Given the financial data for four mutually exclusive alternatives in the table below, determine the best alternative using the incremental rate of return analysis. MARR = 10%. First cost O &M Cost/ year Benefit/year Salvage value Life in years A $16,000 1,600 8,000 4,200 5 B $21,200 900 9,000 4,600 C $36,000 1000 13,000 6,000 D 54,000 1,000 15,000 10,000
- A project is being planned that has an initial investment at time 0, annual revenuesand expenses, and a salvage value at the end of the project lifespan (20 years). The financialvalues are summarized below:Initial investment amount at time 0 $150,000Estimated annual revenue $34,500 per yearEstimated annual expenses $8,700 per yearEstimated salvage value at end of lifespan $10,000Minimum attractive rate of return (MARR) 15%a. Calculate the capital recovery amount CR(i%).b. Using the annual worth (AW) method, determine whether purchasing the equipmentis economically justified.c. Repeat part (a) using the internal rate of return (IRR) method based on annual worth(AW).d. Using the present worth (PW) method, determine the break-even time period afterwhich purchase of the equipment generates a profit. (Find N when PW = 0) year period.Given cash flows for two alternatives as shown in table below, choose the most attractive alternative if MARR = 8%. Year 0 1 2 3 through ∞ Alt. A -$42K $3.6K $3.6K $3.6K Alt. B -$54K $4.7K $4.7K $4.7K Group of answer choices Alt. A Alt. B Select neither Select either:[A] { > Incremental analysis ([ B Alternative], [B wins ]): C A company considering 2 different machines at MARR at 12% Both life spans = 10 years Initial Cost Annual Operating lost Benefits per yin ar Salvage Value \table MM If you are and of frying investment to company decide More than 2 alternatives if the additional increment is worth while, compare Alternative: A Incremental analysis (Alternative) pairs then B C A MARR Company at Considering 2 different machines at 12% Both life spans = 10 years. M/C X м/с у Initial Cost 160000 285000 Annual Operating Cost Benefits per year Salvage Value 45 000 90000 45000 105000 20000 40000