If the capital budget limit is $120,000, the MARR is 10% per year, and all projects have a 10-year life, rank and select from the independent projects using the (a) PI measure, (b) IROR measure, and (c) PW at the MARR. (d) Are different projects selected using the three methods? First Net Income, IROR, PW at Project Cost, $ $ per Year % 10%, $ A −18,000 4,000 18.0 6,578 B −15,000 2,800 13.3 2,205 C −35,000 12,600 34.1 42,422 D −60,000 13,000 17.3 19,879 E −50,000 8,000 9.6 −843

Problem 1: Loblolly Pine Plantation (Known Rotation Range) A forester is considering planting loblolly pine on a recently acquired site. They expect the optimal rotation to be between 20 and 40 years. The following information is available: • • • • Land cost: $500/acre (one-time cost at year 0) Establishment cost: $250/acre at year 0 Annual property taxes: $3/acre/year Timber price: $100/acre/year (assumed constant throughout the rotation) Discount rate: 7% Calculate the LEV for each year between 20 and 40 years and identify the optimal rotation age that maximizes LEV.

How is the decision procedure used when comparing two or more mutually exclusive projects on the basis of the rate-of-return measure?

Standby power for pumps at water distribution booster stations can be provided by either gasoline-or diesel-powered engines. The costs for the gasoline engines are as follows: Gasoline First cost, $ Annual M&O, $ per year Salvage value, $ Life, years - 150,000 -41,000 23,000 15 The incremental PW cash flow equation associated with (diesel – gasoline) is 0 = -40,000 + 11,000 (P/A, i, 15) + 16,000(P/F, i, 15) Determine the following: (a) First cost of the diesel engines (b) Annual M&O cost of the diesel engines (c) Salvage value of the diesel engines

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Mid-Valley Industrial Extension Service, a state-sponsoredagency, provides water quality sampling services toall business and industrial firms in a 10-county region.Last month, the service purchased all necessary lab equipmentfor full in-house testing and analysis. Now, an outsourcingcompany has offered to take over this function ona per-sample basis. Data and quotes for the two optionshave been collected. The MARR for government projectsis 5% per year and a study period of 8 years is chosen.In-house: Equipment and supplies initially cost$125,000 for a life of 8 years, an AOCof $15,000, and annual salaries of$175,000. Sample costs average $25.There is no significant salvage valuefor the equipment and supplies currentlyowned.Outsourced: Cost averages $100 per sample for thefirst 5 years, increasing to $125 persample for years 6 through 8. Determine the breakeven number of tests between the two options.

Compare the alternatives C and D on the basis of a present worth analysis using an interest rate of 15.00% per year and a study period of 10 years. (Include a minus sign if necessary.) Alternative First Cost AOC, per Year Annual Increase in Operating Cost, per Year Salvage Value Life, Years The present worth of alternative C is $ с $-50000 $-8000 $-1500 $14000 10 $-21000 $-9000 $-200 $1500 5 and that of alternative D is $

Dilute hydrogen peroxide (H2O2) is produced in the facility where you work as an engineer. company customer to invest in an additional concentration unit for the production of concentrated hydrogen peroxide (H2O2) in line with the demands of aims. For the establishment of the required unit, the finance company recommends the following financing model for 3 years: First year installments of 100,000 TL per month, 150,000 TL per month in the second year and 175,000 TL per month in the third year. Also at 36 MonthsAn additional balloon payment of 700.000 TL will be made. The monthly interest rate is 2.5%. a) If this proposed financing model was not chosen and all installments were paid equally, equal monthly installments. What would the amount be? b) If no payment was made for this additional concentration facility for 3 years, and at the end of the 3rd year, one-time payment. If so, what would be the amount to be paid? Find what is required by drawing cash flow charts.

ChemCo Enterprises is the manufacturer of Ultra-Dry, a hydrophobic coating that will waterproofanything. Over a 5 year period, the costs associated with the pilot test product line were as follows: first cost of $43,000 and annual costs of $18,000. Annual revenue was $40,000 and used equipment was salvaged for $4,000. What rate of return did the company make on the product?

The capitalized cost (CC) of the given project whose Cash Flow diagram is given below is closest to: