ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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- You are faced with a decision on an investment proposal. Specifically, the estimated additional income from the investment is $125,000 per year; the investment cost is $400,000; and the first year estimated expense of $20,000 and will increase a rate of 5% per year. Assume an 8-year analysis period, no salvage value, and MARR = 15% per year.
a. Calculate the PW and FW of this proposal?
b. What is the ERR ( Ԑ=MARR) of this proposal?
c. What is the Simple and Discounted payback?
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- A perfume company manufactures a single product having a cost of OMR 1.50 per unit. Fixed cost is OMR. 30,000 per annum. The market is such that up to 40,000 units can be sold at a price of OMR 3.00 per unit, but any additional sale must be made at OMR 2.00 per unit. Company has a planned profit of OMR 50,000. 1. What is the revenue at breakeven point? 2. What is the number of units at breakeven point? 3. How many units must be made and sold?arrow_forwardThree mutually exclusive electric-vehicle battery systems are being investigated by a large automobile manufacturer. Pertinent data are given below: Solve, a. Use the PW method to select the best battery system. The MARR is 15% per year, and the system chosen must provide service for 10 years. Assume repeatability. b. Confirm your recommendation in Part (a) using the IRR method.arrow_forward
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