Two methods can be used to produce solar panels for electric power generation. Method 1 will have an initial cost of $520,000, an AOC of $190,000 per year, and $180,000 salvage value after its 3-year life. Method 2 will cost $890,000 with an AOC of $180,000 and a $180,000 salvage value after its 5-year life. Assume your boss asked you to determine which method is better, but she wants the analysis done over a three-year planning period. You estimate the salvage value of Method 2 will be 26% higher after three years than it is after five years. If the MARR is 9% per year determine: The annual worth of Method 2, (in $) Round off to the nearest two (2) decimal places, include sign

Two methods can be used to produce solar panels for electric power generation. Method 1 will have an initial cost of $520,000, an AOC of $190,000 per year, and $180,000 salvage value after its 3-year life. Method 2 will cost $890,000 with an AOC of $180,000 and a $180,000 salvage value after its 5-year life. Assume your boss asked you to determine which method is better, but she wants the analysis done over a three-year planning period. You estimate the salvage value of Method 2 will be 26% higher after three years than it is after five years. If the MARR is 9% per year determine: The annual worth of Method 2, (in $) Round off to the nearest two (2) decimal places, include sign

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Chegg Home Expert Q&A My solutions Student question Time Left: 00:09:10 Which of the statements is INCORRECT? People pursue different happiness such as YOLO or FIRE. Money is not related to happiness at all. On average, experiential purchases are more likely to make people happy compared to material purchases. We need to understand our own well-being first to better understand consumer well-being. Which of the statements is INCORRECT? O People pursue different happiness such as YOLO or FIRE. O Money is not related to happiness at all. O On average, experiential purchases are more likely to make people happy compared to material purchases. O We need to understand our own well-being first to better understand consumer well-being. く

6) You have been assigned to create a new TV game show, and you have an interesting idea that you call, “I WANT TO BE A MILLIONAIRE.” The basics are: 1) two contestants; 2) the show begins with each contestant being given $1 million (!); and then 3) they begin playing a game that can increase or decrease that $1 million. You worry that the initial outlay of $2 million will stun your producers, so you decide to prepare them with a simpler version of your game that you call: “I WANT $3.” There are four steps in this simpler game: There are two contestants/opponents (who do not know each other and cannot communicate with each other during the game). Each player is given $3 at the start of the game. Independently and simultaneously, each player must choose whether they want to add $0, $1, $2 or $3 to their initial stake of $3. Doing so reduces their opponent’s award by $0, $2, $4, or $6, respectively. Each player knows that their payoff at the end of the game is based on their initial…
8. Suppose that you have a big test on Monday and you plan to spend the weekend studying. On Saturday, your friend invites you to spend the day at a water park. It's the last weekend that the park will be open for the year. You'd really like to go to the park, but you're worried that you won't have enough time to study on Sunday. What are the possible tradeoffs of each choice-going to the water park or staying home to study?
1. Alizeh and Kelly were traveling together and have gotten stranded at an airport overnight. They have no cash, but they did both think to bring granola bars and turkey sandwiches with them. They currently each have several granola bars and a few sandwiches. Alizeh announces that she'd be willing to give up a granola bar for one turkey sandwich. Kelly responds that turkey sandwiches are bigger than granola bars so she would be willing to give up a granola bar if she could get half a turkey sandwich. Is Kelly and Alizeh's current allocation of granola bars and turkey sandwiches efficient? Explain why or why not. (Note that you cannot rely on a rule here – you have to specifically explain why the allocation does or does not meet the definition of an efficient allocation.)
Anastasia, Emma, and Greta are deciding what to do on a weekend getaway. They each suggest a first, second, and third choice and then vote on the options. Their first choice, second choice, and third choice preferences are as shown: Anastasia Emma Greta First Choice Вeach Mountain biking Canoeing Second Choice Mountain biking Canoeing Beach Third Choice Canoeing Beach Mountain biking If the choice is between mountain biking and canoeing, how will the group vote? Select the correct answer below: two votes for mountain biking; one vote for canoeing two votes for canoeing; one vote for mountain biking three votes for mountain biking three votes for canoeing
2. Christiaan can go hiking, or he can stay at home. Hiking would be fun if nothing bad happens, but there is a risk if he goes hiking that he will meet a bear (not fun) or get bitten by a snake (very not fun). Christiaan decides that if there is a 5% chance of meeting a bear and a 1% chance of getting bitten by a snake, he would prefer to go hiking rather than stay at home. However, if the chance of meeting a bear is 10% and the chance of a snake bite is 5%, he definitely would rather stay at home. then (a) Consider the utility function: U (stay home) = 25, U (hike no event) = 100, U (hike & snake) -1000, U (hike & bear) = -200. Does this utility function represent Christiaan's pref- erences? Explain. (b) Suppose that the utility function in (a) does represent Christiaan's preferences. Would Christiaan prefer to hike or stay home if the probability of meeting a bear is 6% and the probability of being bitten by a snake is 4%? Show your work.
Table 1: Consumption of Bread and Flour Consumer Consumption Consumption 1 2 3 4 5 of Bread 100 26205 6 15 of Flour 10 90 120 50 75 1202 A supermarket has employed you to do some analysis of their customers' shopping. They have provided you with the data in Table 1. Based on the data in Table 1, explain what preference type you would use in your analysis.
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9. Behavioral economics Indicate whether each of the following examples of behavior is consistent with the way the traditional economic framework suggests people should act, or if it is reserved for behavioral economists to examine. Example Some people would be willing to pay money to lower the incomes of others. Some people treat $60 they earn differently from $60 they win in a random drawing. Some people sacrifice disposable income to help their children pay for college. Some people would turn down a new, higher-paying job if it meant spending less time with their family. Consistent with the Predictions of Traditional Economic Models Reserved for Behavioral Economics
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