1. Using benefit-cost ratio analysis, determine which one of the three mutually exclusive alternatives should be selected. Each alternative has a 6-year useful life. Assume a 20% MARR. First cost Uniform annual benefit Salvage value A $560 $340 140 100 40 0 B C $120 40 0
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- Four mutually exclusive investment alternatives have a 5-year useful life and no salvage value. The MARR is 6%. Which investment should be selected? Initial Cost Uniform Annual Benefit O O O O A B A $400 $100 B $125 $225 $35 $50 C D $500 $1353) A and B are mutually exclusive projects.. What MARR has to be for A to be chosen? A B Initial cost Useful life Annual benefit Salvage value Rate of return $30,000 6 years $8,577 $0 18%lyr $50,000 6 years $8,577 $29,098 12%/yr a) MARR<8.4% b) MARR< 6.4% c) 8.4%A B C $9,000 $12,000 $1,800 Initial cost $15,000 $8,000 $5,000 2 years Annual benefit Salvage value Life in years $2,000 $9,000 3 Years Infinity MARR 10% i. The NPW of alt. A is A) $13,420 B) $17,380 C) $11,000 D) $6,00 ii. The NPW of alt. B is A) $13,420 B) $17,380 C) $11,000 D) $6,000 iii. The NPW of alt. C is A) $13,420 B) $17,380 C) $11,000 D) $6,000 iv. The best alternative among the three alternatives using the PW analysis is A) Alt. A B) Alt. B C) Alt. C D) Either alt. B or alt.Water purification facilities are in the planning stage, with expected lives of 10 years. Two final plans are being compared using a MARR of 15%. Which alternative is preferred using incremental IRR? First Cost O&M Cost Annual Benefits Salvage Value Alt. A Alt. B $1,200,000 $800,000 20,000 250,000 -20,000 30,000 350,000 50,000Data for problems 5 to 8 Data for four mutually exclusive alternatives are given in the table below. Assume a life of 6 years and a MARR of 10%, and EUAB stands for equivalent uniform annual benefit. Alt. A Alt. B Initial Cost EUAB $140 Salvage $40 Value $560 $340 OC1.45 OD079 $100 So Alt. C $120 $40 SO Alt. D Do SO SO SO Nothing The AB/AC ratio for the third increment, (A-B) is OA 0.94 OB. 0.89build a model Each of the three alternatives shown has a 5-yearuseful life. MARR is 10%, a) Using FW, which alternative should be selected? B) Using benefit–cost ratio analysis, which alternative should be selected? C) what is the discounted payback period of each alternative? A B C Cost $ 650.00 $ 500.00 $ 250.00 Uniform annual benefit $ 180.00 $ 140.00 $ 66.00 Useful life, years 3 6 3Sensitivity If the MARR is 5%, compute the value of 'X' that makes the two alternatives equally desirable. Cost Uniform annual benefit Salvage value Useful life, in years A (Newnan 9-63) $150 401 100 6 B X 65 200 (Enter the nearest dollar value without symbols or commas.)You are charged with choosing a vendor to produce a new software that is going to benefit your company. The project has a life cycle of 8 years and MARR of 8% annual interest. Part a.) Draw the cash flow diagram for each vendor. Part b.) Calculate a PW cost for each vendor. Part c.) Indicate which vendor you would choose. Task Development Programming Operation Support Vendor M Cost, $ 200,000 150,000 42,000 20,000 40,000 30,000 Time Frame Now Years 1-4 Now Years 1-3 Years 1-8 Years 1-8 Vendor N Cost, $ Time Frame 70,000 60,000 45,000 50,000 35,000 Now Now Years 1-5 Years 1-8 Years 1-8 Vendor O Cost, $ 150,000 Time Frame Years 1-8Determine feasibility of the project using FW Method. Use MARR = 10%. %3D Alternatives A В C D Capital investment -$150,000 -$85,000 -$75,000 -$120,000 Annual revenues $28,000 $16,000 $15,000 $22,000 Annual expenses -$1,000 -$550 -$500 -$700 Market Value (EOL) $20,000 $10,000 $6,000 $11,000 Life (years) 10 10 10 10 Round off your answer to the NEAREST WHOLE NUMBER Ex. 12345 FW of Alt. A is Blank 1 FW of Alt. B is Blank 2 FW of Alt. C is Blank 3 FW of Alt. D is Blank 42. Two alternatives, a flexible manufacturing cell and fixed automation, have different cost and revenue characteristics as follows: Flexible Cell Fixed Automation Investment S2,500,000 б уears S800,000 in first year; increasing by $100,000 each year thereafter $300,000/year $1,500,000 3 years S800,000/year Life Gross cash savings s100,000 in the first year; decreasing to S80,000 in second year and S70,000 in third year Cash disbursement MARR 20% 20% Assuming "repeatability" and service needed for 6 years, show which alternative is preferred using the method of rate of return.You have been asked to perform a sensitivity analysis on a plant modernization plan. The initial investment is $30,000. Expected annual savings is $13,000. Salvage value is $7,000 after a 7 year planning horizon. The MARR is 12%. Determine the AW if the annual savings change by the following percentages from the initial estimate: b. -80%c. -60%d. -40%e. -20%f. +20%g. +40%h. Determine the percentage change in net annual savings that causes a reversal in the decision regarding the attractiveness of the projectXanadu Mining is considering three mutually exclusive alternatives, as shown in the table below. MARR is 10.0%/year. EOY A001 B002 C003 0 -$210 - $110 -$160 1 $100 $60 $76 2 $110 $60 $76 3 $120 $60 $76 4 $130 $70 $76 Click here to access the TVM Factor Table Calculator art a What is the present worth of each alternative? Alternative A001: $ Alternative B002: $ Alternative C003: $SEE MORE QUESTIONS