A constructionengineer has been asked to recomment an excavator for acquisition. Three alternatives have been identified, having the characteristics shown in the following table. (MARR=12%) Excavator Alternative A B C Useful life 4 years 5 years 6 years Investment $15,500 $20,250 $30,750 Annual operation cost $8,750 $5,850 $3,175 Terminal salvage value $2,500 $3,000 $3,250 a) Apply present worth analysis. b) Use shortest life to establish the planning horizon's length and apply present woth analysis again. c) Use longest life to establish the planning horizon's length and apply present woth analysis once more. d) Repeat PW analysis for 10 years standard analysis period. e) Consider an infinitely long planning period and calculate the annual worth for each investment alternatives.

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Company X is considering the purchase of a helicopter for connecting services between their base airport and the new inter-county airport being built about 30 miles away. It is believed that the chopper will be needed only for 6 years until the Rapid Transit Connection is phased in. The estimates on two types of helicopters under consideration, The Whirl 2 B and The ROT 8, are given below: The Whirl 2 B First Cost Annual Maintenance Salvage Value Useful life in years $95,000 $3,000 $12,000 The ROT 8 $120,000 $9,000 $25,000 6 3 Assuming that the Whirl 2B will be available in the future with identical costs, what is the annual cost advantage of selecting The Whirl 2B ? (Use an interest rate of 10 %) A. cost more than $4,000 C. cost between $4,000 and $3,000 B. save between $3,000 and $2000 D. save more than $4,000

Problem 05.024 Alternative Comparison - Different Lives You and your partner have become very interested in cross-country motorcycle racing and wish to purchase entry-level equipment. You have identified two alternative sets of equipment and gear. Package K has a first cost of $250,000, an operating cost of $5,500 per quarter, and a salvage value of $30,000 after its 2-year life. Package L has a first cost of $170,000 with a lower operating cost of $3,500 per quarter and an estimated $25,000 salvage value after its 4-year life. Which package offers the lower present worth analysis at an interest rate of 8% per year, compounded quarterly? The present worth of package K is $[ and that of package L is $[ (Click to select) offers the lower present worth.

Octavia Bakery is planning to purchase one of two ovens. The expected cash flows for each oven are shown below. MARR is 8%/year.    ​                Model 127B                 ​Model 334A Initial Investment ​        $50,000 ​                    $80,000 Estimated Life ​        10                             ​5 End of Life Salvage ​    $10,000                         ​$0 Annual Income ​        $19,400                     ​$26,000 Annual Expense         ​$10,000 ​                    $6,000   2(a)    What is the discounted payback period for each investment? 2(b)    Which oven should Octavia Bakery purchase if they wish to minimize the DPBP? Answer:

QUESTION 8 For th below two machines and based on AW analysis which machine we should select? MARR=10% Machine A Machine B First cost, $ Annual cost, $/year Salvage value, $ Life, years 3 Answer the below question: B-the AW for machine B= 26,612 12,417 4,135 infinite 140,454 7,170