The following table gives the information about two alternative proposals A and B. Assuming MARR =...
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The following table gives the information about two alternative proposals A and B. Assuming MARR = 6%, conduct the following analyses. Alternatives Capital investment Annual expenses Other expenses Salvage value Life, years (i) (ii) $1,350,000 $110,000 0 0 Infinity B $700,000 $95,000 $200,000 for every 12 years after year 0 0 Infinity Given the information in the table, draw the cash flow diagrams for each alternative. (4 marks) Capitalized worth of alternative B: Calculate the capitalized worth of each of the alternatives. Which alternative should be recommended based on your answers? (5 marks) Capitalized worth of alternative A: Based on the above calculations, Alternative should be recommended. (1 mark) The following table gives the information about two alternative proposals A and B. Assuming MARR = 6%, conduct the following analyses. Alternatives Capital investment Annual expenses Other expenses Salvage value Life, years (i) (ii) $1,350,000 $110,000 0 0 Infinity B $700,000 $95,000 $200,000 for every 12 years after year 0 0 Infinity Given the information in the table, draw the cash flow diagrams for each alternative. (4 marks) Capitalized worth of alternative B: Calculate the capitalized worth of each of the alternatives. Which alternative should be recommended based on your answers? (5 marks) Capitalized worth of alternative A: Based on the above calculations, Alternative should be recommended. (1 mark)
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Answer rating: 100% (QA)
1 The cash flow diagram for alternative A would be as follows Year 0 1350000 ... View the full answer
Related Book For
Engineering Economy
ISBN: 978-0133439274
16th edition
Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Posted Date:
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