Using the incremental B / C analysis (∆B/C). Determine the best alternative. 5. Using the incremental rate of return (∆RoR) analysis. Determine the best alternative. MARR =10%. A B C D First cost 45,000 $25,000 $35,000 $15,000 O &M Cost/year $4,000 $1,500 $3,000 $2,000 Benefit/year $15,000 $9,500 $14,000 $8,000 Salvage value $9,000 $5,000 $7,000 $3,000 Life in years 10

Using the incremental B / C analysis (∆B/C). Determine the best alternative. 5. Using the incremental rate of return (∆RoR) analysis. Determine the best alternative. MARR =10%. A B C D First cost 45,000 $25,000 $35,000 $15,000 O &M Cost/year $4,000 $1,500 $3,000 $2,000 Benefit/year $15,000 $9,500 $14,000 $8,000 Salvage value $9,000 $5,000 $7,000 $3,000 Life in years 10

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 10E

See similar textbooks

Similar questions

What is FW of Design A, Design B, and Design C. Which alternative should be chosen. Do not round off in the solution.
SITUATION3: Under the data collected from the office of Department of Transportation and DPWH over the last 5 years indicate that for each fatality, there are 40 non-fatal injury accidents ($1500 present cost each) and 300 property damage accidents ($2000 present cost each). What is the breakeven value of statistical Me (VSL) needed to justify a highway project if i is 8%? The death rate on a particular three-lane road is 8 per 100 million vehicle-miles. Adding a lane would reduce this to 5 per million, and other accidents would cost $1.5M per mile to build, and annual maintenance would be 3% of the first cost. Assume that the lane would last 40 years. The road carries 10000 vehicle per day. Use reduction factor of 3/8 for all accidents. (Non-CE students no need to answer this item).
What does the term engineering economic decision refer to in all investment decisions relating to an engineering project?
You have been asked to perform an economic evaluation of two projects and recommend one of them for implementation. The project parameters are as follows: Project A Project B Discount Rate 4.0% 4.0% Your analysis concludes that: Project Cost $1,000,000 $750,000 Project Life (yrs) 10 15 Elec. Savings Elec. Cost (kWh/yr) ($/kWh) 800,000 600,000 O Project A is preferable, but Project B also has attractive performance. O Project B is preferable, but Project A also has attractive performance. O Project B is preferable and Project A results in a net loss. O Project A is preferable and Project B results in a net loss. $0.12 $0.12 Annual Cost Escalation Rate 1.5% 1.5%
A business owner is comparing between three alternatives (A, B, and C) for their new project. A. Buy a new equipment with an initial cost of $120,000; annual operating cost of $7000; and salvage value of $5000. B. Buy a new equipment with an initial cost of $105,000; annual operating cost of $10500; and salvage value of $7000. C. Continue using the same equipment they already have with an annual operating cost of $25,000. Life of all alternatives is 12 years. With interest at 8% compounded annually, which alternative should the engineer recommend? Use future worth analysis.
A major equipment purchase is being considered by Metro Atlanta. The initial cost is determined to be $1,000,000. It is estimated that this new equipment will save $100,000 the first year and increase gradually by $50,000 every year for the next 6 years. MARR=10% a. Using Benefit- Cost analysis, what is the Benefit/Cost ratio for this equipment purchase? b. Based on the Benefit/Cost analysis should Metro Atlanta purchase the equipment?
Only part (c) please. Thank you!
Q3: Engineering Economics. Please (1) Identify the Given (2). Draw a cash flow diagram (3). Show Solution in getting the final answer indicated.
List the fundamental Principles in Engineering Economics?
Using the Table below, what is the earliest completion time for this project? Activity Predecessor Time(weeks) A 8 -- B A C 4 D E A 11 F B 3 G DE.F 1 A) 20 weeks B) 21 weeks C) 19 weeks D) 18 weeks
Which among these pairs would provide a good market feasibility judgment on a given project?a. Benefit-Cost Ratio method and breakeven pointb. External Rate of Return method and Internal Rate of Return methodc. Benefit-Cost Ratio method and payback periodd. Minimum Attractive Rate of Return and Present Worth method
4. Incremental ROR and B/C methods require the LCM of the two alternatives being compared. Select one: True False