5. Use the following information to compress one time unit per move using the least- cost method. Assume.the total indirect cost for the project is $700 and there is a savings of $50 per time unit reduced. Record the total direct, indirect, and project costs for cach duration. What is the optimum cost-time schedule for the project? What is the cost? Note: The correct normal project duration and total direct cost are provided. Crash Cost (slope) Maximum Crash Time Normal Time Normal Cost Act. 2 100 A B 100 1 200 40 1 5 200 60 2 200 20 1 200 F 40 1 150 150 G 母母 B D. 3 3 Project duration 14 A E G 2x 5 2x F Totel direct cost $1,200 4

5. Use the following information to compress one time unit per move using the least- cost method. Assume.the total indirect cost for the project is $700 and there is a savings of $50 per time unit reduced. Record the total direct, indirect, and project costs for cach duration. What is the optimum cost-time schedule for the project? What is the cost? Note: The correct normal project duration and total direct cost are provided. Crash Cost (slope) Maximum Crash Time Normal Time Normal Cost Act. 2 100 A B 100 1 200 40 1 5 200 60 2 200 20 1 200 F 40 1 150 150 G 母母 B D. 3 3 Project duration 14 A E G 2x 5 2x F Totel direct cost $1,200 4

Accounting Information Systems

10th Edition

ISBN:9781337619202

Author:Hall, James A.

Publisher:Hall, James A.

Chapter13: Systems Development And Program Change Activities

Section: Chapter Questions

Problem 12P: COST-BENEFIT ANALYSIS Listed in the diagram for Problem 7 are some probability estimates of the...

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Assume a project has three variables: life, first cost, and annual cost. Assume there is no salvage value. For each variable there are three possible values as listed below. The firm uses an interest rate of 8 percent to evaluate engineering projects. For each variable, determine which value is "optimistic" and which is "pessimistic". The remaining value is "most likely". Compute each variable's estimated mean (using the "optimistic/most likely/pessimistic" formula) and using those computed mean values, compute the project's expected present value cost. First cost: -$480,000, -$620,000, -$860,000 Annual cost: -$75,000, -$85,000, -$110,000 Life: 8 years, 10 years, 24 years What is Expected Net Present Worth?
For any given project completion time less than the normal time, a ___________ of possibilities exist, each at __________ total cost. great number, average great number, different lesser number, average lesser number, different
Three alternatives identified as X, Y, and Z were evaluated by the B/C method. The analyst calculated project B/C values of 0.92, 1.34, and 1.29. The alternatives are listed in the order of increasing equivalent total costs. The analyst is not sure whether an incremental analysis is needed. (a) What do you think? If no incremental analysis is needed, why not; if so, which alternatives must be compared incrementally? (b) For what type of projects is incremental analysis never necessary? If X, Y, and Z are all this type of project, which alternatives should be selected based on the calculated B/C values?
Iggy Company is considering three capital expenditure projects. Relevant data for the projects are as follows. Annual Life of Project Investment Income Project 22A $242,800 $16,840 6 years 23A 275,000 20,680 9 years 24A 282,000 15,700 7 years Annual income is constant over the life of the project. Each project is expected to have zero salvage value at the end of the project. Iggy Company uses the straight-line method of depreciation. Click here to view PV table. (a)
Suppose the MWTP in periods 1 (now) and 2 (one year from now) is given by P = 8 - 0.4q Marginal extraction cost = $2.r = 20%. The available supply is 20 units. Determine the allocation of outputs across the two periods that maximizes the present value of the net benefits for the use of the resources. Draw your answer on a graph similar to Figure 5.2 in the text, using engineering graph paper with fine detail (small squares) on the back of this sheet.
Explain with example Annual Equivalent Cost Comparison with Unequal Project Lives?
Sunland Company is considering three capital expenditure projects. Relevant data for the projects are as follows. Project Investment 22A $243,500 271,400 23A 24A 283,000 Annual Life of Income Project $17,320 6 years 20,600 9 years 7 years 15,700 Annual income is constant over the life of the project. Each project is expected to have zero salvage value at the end of the project. Sunland Company uses the straight-line method of depreciation.
1. What is sensitivity analysis? 2. Perform a sensitvity analysis on the unit sales, salvage value, and WACC for a project. Assume that each of these variables deviates from its base-case, or expected value by plus or minus 10%, 20%, and 30%.The base case value for unit sales is 150,000. Calculate NPV for each case (18 NPV in total), then draw a graph with three lines (one for unit sales, one for salvage value, and one for WACC). At the end, perform a sensitivity analysis for the project (what you have seen, what conclusions you can make?). 3. What is the primary weakness of sensitvity analysis? What are its primary advantages?
Calculate the Payback Period of Project A (expressed in years, months and days) Calculate the Accounting Rate of Return on average investment of Project A (expressedto two decimal places). Calculate the Benefit Cost Ratio of both projects (expressed to two decimal places). Which project should be chosen? Why? Calculate the Internal Rate of Return of Project B (expressed to two decimal places). Youranswer must include two net present value calculations (using consecutiverates/percentages) and interpolation.
You have been asked to decide about one of two mutually exclusive alternatives (A & B). The following table gives the initial costs, annual savings in labor costs, and the expected life of two pieces of equipment. Plot PW vs. i for each equipment on the same graph and identify the AAIRR from the graph (i for the intersection). Then, highlight the corresponding value of i in yellow in your spreadsheet. High-cost Equipment (A) Low-cost Equipment (B) Initial Cost $137,910 $100,000 Savings in Labor Costs $42,000 / year $32,000 / year Life 5 years 5 years
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If the project is to be finished in a shorter amount of time, what is the best way to accomplish this goal at the least cost?