Five mutually exclusive alternatives are being considered for providing a sewage- treatment facility. The annual equivalent costs and estimated benefits of the alternatives are as follows: Alternative E Annual Equivalent (in thousands) Cost $1,050 Benefits $1,110 900 $1,810 1,230 $1,390 1,350 $1,500 990 $1,140 Which plan, if any, should be adopted if the Sewage Authority wishes to invest if, and only if, the B-C ratio is at least 1.0.?

Five mutually exclusive alternatives are being considered for providing a sewage- treatment facility. The annual equivalent costs and estimated benefits of the alternatives are as follows: Alternative E Annual Equivalent (in thousands) Cost $1,050 Benefits $1,110 900 $1,810 1,230 $1,390 1,350 $1,500 990 $1,140 Which plan, if any, should be adopted if the Sewage Authority wishes to invest if, and only if, the B-C ratio is at least 1.0.?

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

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:[A] { > Incremental analysis ([ B Alternative], [B wins ]): C A company considering 2 different machines at MARR at 12% Both life spans = 10 years Initial Cost Annual Operating lost Benefits per yin ar Salvage Value \table MM If you are and of frying investment to company decide More than 2 alternatives if the additional increment is worth while, compare Alternative: A Incremental analysis (Alternative) pairs then B C A MARR Company at Considering 2 different machines at 12% Both life spans = 10 years. M/C X м/с у Initial Cost 160000 285000 Annual Operating Cost Benefits per year Salvage Value 45 000 90000 45000 105000 20000 40000
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The five mutually exclusive alternatives shown below are under consideration for improving visitor safety and access to additional areas of a national park. If all alternatives are considered to last indefinitely, determine which should be selected on the basis of a rate of return analysis using an interest rate of 10%. A B C D E_ First cost, $ millions -20 -40 -35 -90 -70 Annual M&O cost, $ millions -2 -1.5 -1.9 -1.1 -1.3 Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
The Water Regulatory Agency is considering five mutually exclusive alternatives for providing a sewage-treatment facility. The annual equivalent costs and estimated benefits of the alternatives are as follows: Alternative A B C D E Annual Equivalent Your answer Cost Php 53,000,000 44,500,000 61,000,000 68,250,000 49,990,000 Benefits Php 55,300,000 41,000,000 69,850,000 75,000,000 56,990,000 3. Using the problem above, which plan, if any, should be adopted if the Water Regulatory Agency wishes to invest if, and only if, the B-C ratio is at least 1.0? Use AW
Given the following pertinent data for four alternatives, what is the best alternative using the incremental ROR method given MARR=10% Initial Cost Annual CF, $ Life, years 30 O Alt. A Alt. B O Alt. C A O Alt. D B +22,000 +35,000 с -200,000 -275,000 -190,000 -331,350 30 D +19500 +42,000 30 30
O b. 3425 O c. 2369 O d. 3825 Clear my choice Alternative X has a first cost of 33000 an annuàl operating cost of 6300 , and a'salvage value of 9525 after 2 year. Alternative Y has a first cost of 34000 an annual operating cost of 6400, and a salvage value of 13400 after 2 year. If MARR of 2% per year, approximately what is the PW of each alternative? Select one: O a. PW of X= -36438 and PW of Y= -33881 O b. PW of X= -36802 and PW of Y= -34220 O c. PW of X= -36077 and PW of Y= -33546 O d. PW of X= -37170 and PW of Y= -34562 Next pa US ACTIVITY 2:23 AM Ca ENG 4/21/202 hp
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Compare the alternatives C and D on the basis of a present worth analysis using an interest rate of 13% per year and a study period of 10 years. Alternative C $-46,000 $4,000 $-1,300 $6,000 10 First Cost AOC, per Year Annual Increase in Operating Cost, per Year Salvage Value Life. Years The present worth of alternative C is $1 (Click to select) offers the lower present worth. HELIME BIEN D $-20,000 $-7,500 $-100 $1,300 5 and that of alternative D is $ A
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On the extra investment of the Mutually exclusive Independent Specified study period Do nothing alternative 5. higher initial cost alternative Future worth Every other alternative Incremental ROR Over one life cycle of each alternative Leest common 10 multiple of their analysis lives Motch eoch of the options above to the items below. When only one alternative is to be selected from multiple alternatives, the alternatives are said to be In evaluating multiple independent alternatives, each elternative is compared against the. In evaluating mutually exclusive alternatives on the basis of rate of return, it is necessary to conduct a (an). obtain the same ranking as the PW and AW methods. in order to A tabulation of incremental cash flow between two different-life alternatives must be prepared over the The rate of return calculated from an incremental analysis represents the rate of return obtainable
Projects A and B have first costs of $6,500 and $17,000, respectively. Project A has net annualbenefits of $2,000 during each year of its 5-year useful life, after which it can be replacedidentically.Project B has net annual benefits of $3,000 during each year of its 10-year life. Use present worthanalysis, and an interest rate of 10% to determine which project to select.
A project is being planned that has an initial investment at time 0, annual revenuesand expenses, and a salvage value at the end of the project lifespan (20 years). The financialvalues are summarized below:Initial investment amount at time 0 $150,000Estimated annual revenue $34,500 per yearEstimated annual expenses $8,700 per yearEstimated salvage value at end of lifespan $10,000Minimum attractive rate of return (MARR) 15%a. Calculate the capital recovery amount CR(i%).b. Using the annual worth (AW) method, determine whether purchasing the equipmentis economically justified.c. Repeat part (a) using the internal rate of return (IRR) method based on annual worth(AW).d. Using the present worth (PW) method, determine the break-even time period afterwhich purchase of the equipment generates a profit. (Find N when PW = 0) year period.