ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- The consultancy Imagination Inc. is working with its manufacturing client Parts-R-Us to improve their on-time performance. The firm can earn a bonus of up to $1,000,000 based on how much the on-time performance actually improves. It's current (baseline) on-time performance is 90%. The company typically completes approximately 1,000 orders per month, with approximately 100 orders delayed. The bonus payment is prorated according to the following criteria: · The on-time performance improvement is calculated based on a reduction in late events or an improvement in on-time performance. · No bonus is earned for the first 25% reduction in late events, say from 100 to 75. Maximum bonus is earned once Parts-R-Us achieves 95% on-time performance. Please answer the following: Write down a formula to determine the total bonus amount to be received Using your formula, show how much bonus would be paid if Parts-R-Us achieves 94% on-time performance.arrow_forwardRESUELVA EL SIGUIENTE PROBLEMA Investment Annual operating Cost. Began first (1)year until the 6th year (A=$1,500) Annual Revenues: Began first (1¹h)year until the 6th year. Additional Revenues: Gradient beginning 2nd year G= $800 until the 6th year. Salvage Value at the end of 6th year or MV8= $2,000 Investment life n=6 years. MARR=6% $10,000 1,500 2,500 G=$800 MV6= $2,000 a. Draw the cash flow diagram b. PW, AW and FW Determine if the investment is viable or not. c. IRR d. ERRarrow_forwardTwo investment projects are being evaluated based on their payback periods. The first alternative requires an initial investment of $520,000, has gross revenues of $85,000, annual O&M costs of $17,000 and a service life of 23 years. What is the project's discounted payback period if the MARR is 10% per year? OA. 8.8 years OB. 19.1 years OC. 15.2 years OD. 9.9 years If the second alternative has a payback period of 20 years, which alternative should be preferred based on the payback period? OA. The second alternative OB. The first alternativearrow_forward
- A company purchases manufacturing equipment for $ 3,950,000. The company produces 1,800 units of production per year. The revenue associated with each production unit is $ 1,310. The total annual costs per production unit is $ 630. a) What is the non-discounted payback period? b) What is the payback period if MARR = 20.00% Answer to part b) can be within a 1 year range.arrow_forwardAnswer part A Answer part Barrow_forwardThe young and great expert Hand written solution is not allowedarrow_forward
- A $45,000 investment in a new conveyor system is projected to improve throughput and increasing revenue by $14,000 per year for five years The conveyor will have an estimated market value of $4,000 at the end of five years. Using an MARR = 12% per year, what is the FW? $-19,329.40 $13,635.70 $16,998.90 none of the above W ?arrow_forwardA $45,000 investment in a new conveyor system is projected to improve throughput and increasing revenue by $14,000 per year for five years The conveyor will have an estimated market value of $4,000 at the end of five years. Using an MARR = 12% per year, what is the FW? $-19,329.40 $13,635.70 $16,998.90 none of the above K ?arrow_forwardTwo investment projects are being evaluated based on their payback periods. The first alternative requires an initial investment of $760,000, has gross revenues of $118,000, annual O &M costs of $23,000 and a service life of 20 years. What is the project's discounted payback period if the MARR is 8% per year? OA. 8.3 years OB. 13.3 years O C. 16.7 years OD. 9.4 years If the second alternative has a payback period of 8 years, which alternative should be preferred based on the payback period? OA. The first alternative OB. The second alternativearrow_forward
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