A project has a life of 10 years and no salvage value. Your firm uses anMARR of 8% to evaluate projects. The project has uncertain costs andrevenue as shown in the table below:NetInitial Cost ProbabilityProbabilityRevenue$110,000 0.25$30,000 0.15$240,000 0.60$44,0000.55$330,000 0.15$54,0000.30Determine the risk for the project expressed as the standard deviation ofthe expected value of the EUAW. Express your answer in $ to the nearest$100.

The project has three different scenarios, each with a probability and an associated initial cost…

Answered: A project has a life of 10 years and no…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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1) The sensitivity graph of a project is presented below: 70 60 Present Worth ('000 $) 50 40 30 SV 20 10 MARR -20% -15% -10% -5% C) FC D) VC E) O&M Base Deviation What is the most sensitive input of the project? A) MARR B) SV O&M FC VC 0% 5% 10% 15% 20%
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I want you to provide me the Cash Flow diagram of the problem. Only cash flow diagram, the solution is already there. Thanks in advance! The annual estimated cash flow is $140,000. The salvage value will be 12% of the initial price after 5 years. The discount rate (r) is 18% Let us assume the initial price of the doughnut machine be X. PV of cash inflows=PV of cash outflows$140,000×PVAF4,18%+.12X×PVF5,18%=X$140,000×2.69006180465+.12X×0.43710921621=X$376,608.652651=X-0.05245310594$376,608.652651=0.94754689406XX=$397,456.479475 The maximum purchase price of the doughnut machine is $397,456.48.
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13.12 You work for Bellevue Window Products. While performing an analysis for a new window prod- uct, you found a report from last year that pro- vided the following information regarding the manufacture of a similar product: annual produc- tion rate T 40,000 units; selling price = $70 per unit; fixed production cost = $240,000 per year; variable production cost = $1,700,000 per year; variable selling expenses = $96,000 per year. As a first-cut, you decide to use this information to estimate (a) the breakeven production rate per year, (b) the company's profit last year, and (c) the annual production rate that would generate a profit of $1,000,000 per year. What are your estimates?
The estimates for a project appear in the following table: Dear optimistic most likely pessimist Fixed cost($) 250,000 250,000 250,000 Annual profit ($) 20,000 15,000 8,000 Shelf life(years) 30 30 30 Residual value($) 000 to. Use the range of values to calculate the heavy average of benefits. b. Using the heavy average, calculate the Equivalent Average Present Value for this project. Use a MARR of 10%. Heavy average annual benefits =$ ; Average Present Value = $
IC OM B D Life/years X OY OZ OW OV Y $420,000 $45,000 $110,000 $20,000 10 Z $540,000 $35,000 $260,000 $45,000 20 W V $500,000 $200,000 $50,000 $20,000 $80,000 $180,000 $10,000 $30,000 10 20 $250,000 $40,000 $90,000 $10,000 15 based on the above ME alternatives and using the B/C analysis, which alternative we should select?i=10%. X
20 O It costs a pharmaceutical company $35,000 to produce a 1000-pound batch of a drug. The average yield from a batch is unknown but the best case is 90% yield (that is, 900 pounds of good drug will be produced), the most likely case is 85% yield, and the worst case is 70% yield. The annual demand for the drug is unknown, with the best case being 22,000 pounds, the most likely case 18,000 pounds, and the worst case 12.000 pounds. The drug sells for $60 per pound and leftover amounts of the drug can be sold for $8 per pound. To maximize annual expected profit, how many batches of the drug should the company produce? You can assume that it will produce the batches only once, before demand for the drug is known. You should consider a range of batches between 13 and 22.
The annual profit from an investment is $20,000 each year for 5 years and the cost of investment is $80,000 with a salvage value of $50,000. The discount rate (cost of capital) at this risk level is 12%. Based on the given information, the net present value of the investment = $ 20,467 (round your response to the nearest whole number).
Management Kdan Cloud main-2-11 2 A= Outlines Q Search R Share Tool TT Ov Comment & Markup ►Functions of two variables Solutions 195% + T Annotation FAX OCR Q Editor OCR Convert Fax Search ii. Add a contour plot for the profit function and use this to estimate the maximum profit that the company can realize with this budget and the corresponding production amounts. iii. Now find the exact values for the production amounts and the maximum profit by compu- tation. 19. A firm produces two product: ⚫ a niche product with inverse demand function given by p₁ = 100-291, and • a standard product with fixed price of 2 monetary units, so p2 = 2. The variable production cost for the niche product is 5 monetary units per unit of production; for the standard product it is 1 monetary unit per unit of production. There is a fixed production cost of 100. (a) Find the equation of the revenue function R (91,92), as well as its domain. (b) Show on a graph which production amounts for the two products…
300 +A 250 200 150 100 (intel CORE IS 50- 06. The Average Total Cost (AC) reaches a minimum at O (a) Q=6 O (b) Q=10 0 Q 0 2 4 6 8 10 12 14 16 18 20 (c) Q=12 O (d) Q=15 # TC Type here to search TVC St TFC 30 25 20 15 10 5 Click Save and Submit to save and submit. Click Save All Answers to save all answers. SA 0 0 2 4 6 8 10 12 14 16 18 20 Save All Answers MC AC AVC AFC (? Save and Submit DELL

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