6) Suppose that you have to decide between three mutually exclusive alternatives regarding the manufacturing techniques of the plant you are working in as an engincer. Following list is given: 20,000 7,000 4 5 Technique A (S) | Technique B (S) | Technique C (S) 40,000 20,000 First investment (initial cost) Salvage value Operating cost per hour Useful life (year) Here, system A, B, and operates 6, 12, and 20 hours a day, respectively. Assume that each are working 310 days per year. Assuming MARR is 12%, find the followings for each of these alternatives: a) Assuming a very long life for each, capitalized cost (CC)? b) Capital recovery (CR) c) Now suppose that revenue values for all are the same and given by $70,000. Which one would you prefer by using the AW analyses? 30,000 5.000 6. 4 20
6) Suppose that you have to decide between three mutually exclusive alternatives regarding the manufacturing techniques of the plant you are working in as an engincer. Following list is given: 20,000 7,000 4 5 Technique A (S) | Technique B (S) | Technique C (S) 40,000 20,000 First investment (initial cost) Salvage value Operating cost per hour Useful life (year) Here, system A, B, and operates 6, 12, and 20 hours a day, respectively. Assume that each are working 310 days per year. Assuming MARR is 12%, find the followings for each of these alternatives: a) Assuming a very long life for each, capitalized cost (CC)? b) Capital recovery (CR) c) Now suppose that revenue values for all are the same and given by $70,000. Which one would you prefer by using the AW analyses? 30,000 5.000 6. 4 20
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:6) Suppose that you have to decide between three mutually exclusive alternatives regarding the manufacturing techniques
of the plant you are working in as an engineer. Following list is given:
Technique A (S) | Technique B ($) | Technique C ($)
20,000
7,000
4
First investment (initial cost)
Salvage value
Operating cost per hour
Useful life (year)
Here, system A, B, and operates 6, 12, and 20 hours a day, respectively. Assume that each are working 310 days per year.
Assuming MARR is 12%, find the followings for each of these alternatives:
a) Assuming a very long life for each, capitalized cost (CC)? b) Capital recovery (CR) c) Now suppose that revenue values
for all are the same and given by $70,000. Which one would you prefer by using the AW analyses?
40,000
20,000
2
20
30,000
5,000
6
5
4.
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