Q: Theoretically, when we are going through the procedure to calculate the incremental ROR (ΔROR), we…
A: When there are two competing investment possibilities with differing investment quantities, the…
Q: An aerospace industry decides to purchase a new advanced machine.the cost of the machine are…
A: Given: To Find: The optimal machine:
Q: Decision D6, which has three possible choices (X, Y, or Z), must be made in year 3 of a 6-year study…
A: We are going to use expectation hypothesis to calculate Present Wroth for each project to answer…
Q: A 2,000 square foot house in New Jersey costs $1,725 each winter to heat with its existing…
A: According to the data given, we will construct an excel sheet to find out the discounted payback…
Q: Assume alternatives A and B are being evaluated by the rate of return method against a MARR of 15%…
A: The internal rate of return (IRR) of alternative A is higher than that of IRR of alternative B.
Q: The present worth of a multi-year investment with all positive cash flows (incomes) other than the…
A: The present value can be calculated by using the equation given below:
Q: Lignin is a basic component of almost any plant that grows, so it is one of the most abundant…
A: * SOLUTION :- From the cash flow diagram we can see the cash flow in each subsequent year is…
Q: An integrated, combined cycle power plant produces 285 MW of electricity by gasifying coal. The…
A: The period of payback shows the estimated the year which are essential to cash inflow equivalent the…
Q: The Department of Energy is proposing new rules mandating either a 20% increase or a 35% increase in…
A: The table shows the two alternative with 20% and 35% in efficiency as follows:
Q: Which of the computational methods do we use to find the incremental IRR of the given projects and…
A: We use Net Present Value (NPV) to compute IRR through the incremental analysis and interpolation…
Q: PW analysis for one project refers to the value of all cash flows converted to a single sum…
A: In the mentioned question we have been asked what actually PW is and do the given statement is true…
Q: A reservoir will initially cost P200M, have P1M in annual maintenance costs, and P5M in minor…
A: Initial cost is the amount of revenue needed to build or renovate a significant institution.…
Q: XYZ Inc plans to construct an additional building at the end of 10 years for for an estimated cost…
A: Time period = 10 years Estimated cost after 10 years = P5,000,000 Interest rate = 13% = 0.13…
Q: The cost of upgrading a section of Grand Loop Road in Yellowstone National Park is $2.1 million.…
A:
Q: A piece of new equipment has been proposed by engineers to increase the productivity of a certain…
A: here we calculate the present worth by using the formula and draw the cash flow which are as follow-
Q: The engineering team at Manuel's Manufacturing, Inc., is planning to purchase an enterprise resource…
A: Present worth:- The term "present value" refers to the value that a monetary amount currently has as…
Q: For each of the following scenarios, state whether an incremental ROR analysis is required to select…
A: Since, the question has several parts. As per our honor code, we are providing solution of only…
Q: A printing press machine has a cash equivalent of P250,000. For the first three years, it will…
A: Given information First cost=P250000 Profit for 3 years=P20000 per year Profit for 4 years=P35000…
Q: Garcia and Company is considering four mutually exclusive alternatives for CNC machining. The four…
A: The incremental internal rate of return is used in a situation where there are two probabilities…
Q: Why is it okay to use Incremental IRR between two same life projects that has different first cost…
A: incremental IRR is important to work on the financial returns, with the two competition investment…
Q: The cost of upgrading a section of Grand Loop Road in Yellowstone National Park is $2.4 million.…
A: Given: Cost of upgrading=$2.4 million Other maintenance every 5 years=$460000 Interest rate=11%
Q: A cement grinding mill “A” with a capacity of 50 tons per hour utilizes forged steel grinding balls…
A: Given: Mill A: Capacity per hour=50 tons Cost per ton=P12000 Wear rate per ton cement milled=100…
Q: new vending machine is being considered to purchase. The estimated first cost is php 75,000 the…
A:
Q: A water utility is investigating two options for delivering water from a new source. The costs for…
A:
Q: A municipal bond with a face value of $10,000 was issued today with an interest rate of 6% per year…
A: Face value (FV) is $10,000. The interest rate (i) is 6%. Interest payment is semiannual. Thus, the…
Q: Required information A regional infrastructure building and maintenance contractor must decide to…
A: Present price of machine = $67300 Future price of machine = $81300 Time = 2 years Interest rate =…
Q: (engineering economics) Determine the best alternative based on a 12% MARR using the following…
A: Year A B C 0 -100 -120 -40 1 0 0 -50 2 10 40 15 3 10 0 15 4 10 40 15 5 10 0 15 6 10 40…
Q: LEIS company is planning to borrow P10.5M for a company expansion and is not sure what the interest…
A: In economics, expansion is an upward trend in the business cycle characterised by an increase in…
Q: You are considering two types of automobiles. Model A costs $18,000, andModel B costs…
A: Table 1 shows the initial purchase price and sales price of model A and model B automobiles…
Q: Capital Investment $100,000 $152,000 $184,000 $75,000 Annual Revenues less expenses 15,200 31,900…
A: There is 4 mutually exclusive alternative with their costs and revenues are given. MARR is 15% and…
Q: what is the rate of return for each alternative and for the incremental difference? if the MARR is…
A: The net gain or loss of associate investment over a particular period of time, explicit as a…
Q: If the IRR of Alternative A is 10%, the IRR of Alternative B is 8% and the MARR is 6%, which of the…
A: Internal rate of return (IRR) analyzes the investment for profitability by measuring the expected…
Q: Schneeberger, Inc. is considering two alternatives to increase the acceleration of its linear motor…
A:
Q: The PW-based relation for the incremental cash flow series to find Δi* between the lower first-cost…
A: The incremental rate of return can be calculated using the spreadsheet function as follows:
Q: To remedy the traffic situation at a busy intersection in Quezon City, two plans are being…
A: Given: Plan A: Cost of Cloverleaf=P 92,00,000 Plan B: P 65,00,000 Interest rate=18%
Q: A bridge will have a first cost of Php 10,000,000, an annual maintenance cost of Php50,000 and minor…
A: Capitalized cost - Additional cost is based on the value of assets declared in the company balance…
Q: Q5-) A regional infrastructure building and maintenance contractor must decide to buy a new compact…
A: Inflation refers to a rise in the average level of price of goods and service in the economy. A…
Q: Advanced Modular Technology (AMT) makes energy cleaner, safer, more secure and more efficient. It…
A: Internal Rate of Return (IRR) is defined as the minimum amount of return which an investor requires…
Q: The first cost of a certain piece of equipment is Php50,000. It will have an annual operating cost…
A: In economics, present value refers to the current value of the future stream of cash flow. Future…
Q: Complete the decision rule for the IRR method. If then the project is economically justified.
A: IRR stands for internal rate of returns. IRR is the expected growth that an investment produces…
Q: A printing press machine has a cash equivalent of P250,000. For the first three years, it will…
A: Given, Total investment of printing press machine is P250,000. Profit for first 3 years(each) =…
Q: Lignin is a basic component of almost any plant that grows, so it is one of the most abundant…
A: Present worth is that the idea that states associate degree quantity of cash these days is value…
Q: A large lithium-ion phosphate battery pack for an industrial application is expected to save $20,000…
A: Investment: It is a fundamental piece of abundance creation, which causes you beat expansion to…
Q: Beaver, a city in the United States, is attempting to attract a professional soccer team. Beaver is…
A: Initial cost = $ 380million Maintenance cost = $730,000 Painting Cost = 76,000 at 9th year Period =…
Q: Two electric motors (A and B) are being considered to drive a centrifugal pump. Each motor is…
A: Given that, Two electric motors (A and B) are being considered to drive a centrifugal pump. Each…
Q: A piece of new equipment has been proposed by engineers to increase the productivity of a certain…
A: Given: Investment (I) = $10,000 Savings (A) = $5,000 Salvage Value (S) = $1500 Study period =five…
Q: Fiesta Foundry is considering a new furnace that will allow them to be more productive. Three…
A: In this question we have to find out the which furnace will be selected according the above…
Fiesta Foundry is considering a new furnace that will allow them to be more productive. Three alternative furnaces are under consideration. Perform an incremental analysis of these alternatives using the
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
- Fiesta Foundry is considering a new furnace that will allow them to be more productive. Three alternative furnaces are under consideration. Perform an incremental analysis of these alternatives using the IRR method for each increment of cash flows. The MARR is 10% per year. E Click the icon to view the description of the alternatives. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 10% per year. Perform the incremental PW Analysis. Fill-in the table below (Hint: Order alternatives by increasing capital investment). (Round to the nearest dollar.) Incremental Investment Inc. PW Alternative to be selected A V AA 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.Example A company is considering two types of equipment for its manufacturing plant. Pertinent data are as follows: Freeze Type A Type B First cost P200,000 P300,000 Annual Operating Cost P32,000 P24,000 D Annual Labor Cost P50,000 P32,000 Insurance and Property Taxes 3% 3% Payroll Taxes 4% 4% Estimated Life TO 10 If the minimum required rate of return is 15%, which equipment should be selected?
- The General Hospital is evaluating new office equipment offered by three companies. Cost Annual benefit End of useful life salvage value Useful life (yrs) Select one: 9.5% 8.5% 7.5% Company A $500 $130 $0 10.5% 5 The incremental rate of return between Company B and Company C is close to Company B $600 $115 $250 5 Company C $700 $100 $180 10ABC Inc is considering the purchase of new pulverizing equipment. The top management of the company has requested that you provide the net present value for the equipment being considered. The relevant data for the new equipment are presented below: First Cost $125,000 Annual Income 10,000 Annual Operating Cost 8,000 (The first year and increasing by $750 per year ) Property Taxes 5% of first cost Salvage Value 8% of first cost ABC Inc has a minimum attractive rate of return (MARR) of 4% and the equipment has an expected useful life of 6 yearsA 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 $25,000. Life of all alternatives is 12 years. With interest at 8% compounded annually, which alternative should the engineer recommend? Use future worth analysis.
- A P 3.3 M 1,000,000 320,000 330,000 B P 3.4 M 1,120,000 420,000 340,000 C D P 4.4 M P 2.8 M 750,000 1,400,000 180,000 500,000 280,000 440,000 Investment Annual revenue Annual cost Salvage value All of the proposals have a project life of 10 years. D and E are mutually exclusive. It is also known that B is contingent on D, while A and C are contingent on E. The maximum amount available for investment is P 4.5 M. Matrix of Investment Alternatives (Format) Alternative A B C E P 5.2 M 1,600,000 550,000 520,000 a. Develop the matrix of investment alternatives. Indicate which alternatives are feasible. (Follow the format of the table given below). D E Feasible? b. Use the Future Worth method to find the best alternative. Assume that MARR is 14% per year.The FW analysis: a. Is appropriate when one plans to achieve a particular financial goal at some point in the future b. Sometimes results in the same decision as PW and AW c. Does not utilize the concept of time value of money d. All of the above.Problem 2: Select one of the following two plans using the present worth method. Given i= 20% per year. 1st Cost ($) Life (years) Salvage value ($) Annual Cost ($) Plan 1 25,000 10 5,000 6,000 Plan 2 50,000 20 0 2,500
- PLABOR МIC $7.00 -S $5.25 $4.50 MVP QLABOR 1000 1500kuzukuzu12121@outlook.com just sent here I NEED EXCEL FİLE. Determine the NPW, AW, FW and IRR of the following engineering project. Initial Cost ($400,000) The Study Period 15 years Salvage (Market) Value of the project 15% of the initial cost Operating Costs in the first year($9,000) Cost Increase 3% per year Benefits in the first year $40,000 Benefit Increase 9% per year MARR 8% per year Is the Project acceptable? WHY?:[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