Q3) For a 12% per year MARR, consider the following two investment projects: Project A Net Cash Flow, BD Project B Net Cash Flow, BD Year -2000 -3000 1 1000 1100 2 700 1900 3 1000 1100 4 700 Determine the following: a) Based on Rate of Return analysis (IRR), which project would you select? Why? b) Based on Simple Payback analysis (np), which project would you select? Why? c) Which analysis method is better to use in engineering analysis? Why?

Q3) For a 12% per year MARR, consider the following two investment projects: Project A Net Cash Flow, BD Project B Net Cash Flow, BD Year -2000 -3000 1 1000 1100 2 700 1900 3 1000 1100 4 700 Determine the following: a) Based on Rate of Return analysis (IRR), which project would you select? Why? b) Based on Simple Payback analysis (np), which project would you select? Why? c) Which analysis method is better to use in engineering analysis? Why?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Similar questions

Based on PW values, determine which of the following independent projects should be selected for investment if $240,000 is available and the MARR is 10% per year. (NCF = net cash flow)
select projects options are 3, 2, 1&3, 2&3, or 1&2
3. A corporate jet costs $1,350,000 and will incur $200,000 per year in fixed costs (maintenance, licenses, insurance, and hangar rental) and $277 per hour in variable costs (fuel, pilot expense, etc.). The jet will be operated for 1,200 hours per year for five years and then sold for $650,000. The MARR is 15% per year. (a) Determine the capital recovery cost of the jet. (b) What is the EUAC of the jet?
10. Solve the given question and give the correct answer.
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The following five alternatives that are evaluated by the rate of return method, If the alternatives are independent and the MARR is 15% per year, the onels) to select is (are) Incremental ROR, N. When Compared with Alternative Initial Investment,S Alternative Alternative A BC DE 10.6 27.3 194 353 25.0 -25,000 -35,000 13.1 38.5 24.4 -40,000 13.4 46.5 27.3 26.8 -60,000 25.4 -75,000 20.2 Only D O Only D and E O Only A D, and E O Only E
Consider the cashflow (n = 10 years, MARR = e = 14%) Cash Flow A Investment P 180,000 Revenues P 350,000 per year Expenses P 400,000 per year for the first 3 years, decreasing by P 50,000 per year thereafter a. Determine the Annual Worth (AW) of each project. b. Determine the Internal Rate of Return (IRR) of each project. c. Determine the External Rate of Return (ERR) of each project. Salvage Value P 40,000
Q4. The cash flow details of a public project is as follows = BD 250000 Initial cost /investment Annual benefits/revenues = BD 120000 Worth of annual cost Salvage value Interest rate per year 8% and useful lie 30 Years Use the three project evaluation methods( PW, FW, AW) = BD 12,000 = BD 150000
7.
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answer asap with diagrams
Question 4 You are part of the Project Evaluation Committee in ProTiga Bhd., one of the automotive manufacturer in South East Asia. The manufacturer is shifting the focus of its previous "Number One Choice for Local" to "A Leading Electric Vehicle Company in South East Asia". Below are the projects to evaluate under the responsibility of Project Evaluation Committee. a) b) Acquire an existing RM1,3 billion Electric Vehicle Company from China for technology transfer purpose with the annual saving of RM200 million for 10 years. Assemble professional manpower to strengthen the ProTiga Racing Team with investment of RM700,000 and annual saving of RM150,000 for 5 years. The management has considered the expenses required to continue the business of ProTiga Berhad in coming 10 years. Thus, the management has to consider the additional expenses in the annual income with 5% discount rate. Using Net Present Value (NPV) method, determine which project between (a) and (b) that should be given…