Answered step by step
Verified Expert Solution
Question
1 Approved Answer
[5 marks] Question 2 Spreadsheet-based evaluation of equal-life, mutually exclusive alternatives can be performed using the single- cell PV function when the annual amount A
[5 marks] Question 2 Spreadsheet-based evaluation of equal-life, mutually exclusive alternatives can be performed using the single- cell PV function when the annual amount A is the same. The general format to determine the PV is: - K-PV(%,n,A,F) Cesar, a petroleum engineer, has identified two equivalent diesel-powered generators to be purchased for an offshore platform. Use i = 12% per year to determine which is the more economic. AOC, annual operating cost. Generator 1 Generator 2 Initial Cash Outlay K, $ -80,000 -120,000 Salvage Value S, $ 15,000 40,000 n, years 3 3 AOC, $/year -30,000 -8,000 In Excel, follow the format in the above equation, EK - PV(%,n,A,F), in a single cell for each alternative. A. Compute the NPC for each generator. In the assignment that you will be submitting please provide both Excel formulas used to compute each NPC value and the NPC values themselves. [3 marks] B. Which generator is selected and why? [2 marks] [5 marks] Question 2 Spreadsheet-based evaluation of equal-life, mutually exclusive alternatives can be performed using the single- cell PV function when the annual amount A is the same. The general format to determine the PV is: - K-PV(%,n,A,F) Cesar, a petroleum engineer, has identified two equivalent diesel-powered generators to be purchased for an offshore platform. Use i = 12% per year to determine which is the more economic. AOC, annual operating cost. Generator 1 Generator 2 Initial Cash Outlay K, $ -80,000 -120,000 Salvage Value S, $ 15,000 40,000 n, years 3 3 AOC, $/year -30,000 -8,000 In Excel, follow the format in the above equation, EK - PV(%,n,A,F), in a single cell for each alternative. A. Compute the NPC for each generator. In the assignment that you will be submitting please provide both Excel formulas used to compute each NPC value and the NPC values themselves. [3 marks] B. Which generator is selected and why? [2 marks]
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started