2- Calculate the internal rate of return for the following investments: Initial Cost Annual Benefit Answer: 13.30% Operations and Maintenance Overhaul at year 3 Salvage Value Useful Life $-30,000 $10,000 $2,000 $8,000 $8,000 6 years

A new bridge project is being evaluated at i = 20%. Recommend an alternative based on the capitalized cost for each. AnnualO&M Life(years) $250,000 $500,000 Construction Cost Concrete $50million Steel $40million Solution: 1. Here 2. CC concrete 50 3. CC steel 4. Choose capitalized cost (CC). million dollars; million dollars; 70 50

1. An industrial plant is considering the purchase of a centrifugal pump. Three offers were received and basis of selection have been tabulated as follows:   Offer A Offer B Offer C Price of pump P60,000 P96,000 P120,000 Economic life, years 3 5 10 Salvage value at end of economic life   5,000   10,000   8,000 Yearly maintenance cost   10,000   6,000   5,000       .                   If cost of money is 14%, what offer would you recommend to be purchased? Use the rate of return method, the annual cost method, present worth method and equivalent uniform annual cost method for the evaluation Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.