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Fourteen multiple choices questions and one problem. Points are as indicated (5 pts) The design A and B in the table shown below are compared

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Fourteen multiple choices questions and one problem. Points are as indicated (5 pts) The design A and B in the table shown below are compared correct equation determines the capitalized cost of Design A A. PW-45000-10,00,1 0.52%6) . 37,000( PF.10.52%2) . 1. using capitalized costs at10% per year compounded continuously The Design ADesig B Fitco Anneal cest year Salvage v 45,000 10,00o 13,000 S 13.000 PF,1 0.52%,6) Life, years C. PW-[-45,000(AP,10%3)-10,000 + 13,000(AF.0MJn-0.10 PW--45,000AP. 10.52%.3). 10,000 + 13,000(A/F,10.52563)] + 0.1052 D. 2- (5 pts) The Pw value for Design B in the table above at an interest rate of 8% per year is closest to A. S-128.020. B. $-94,000. C.S-57.200 D. S-140,000. 3. (S pts) Two alternatives in the table are being evaluated. If the evaluation of the two alternatives is per- formed on a present basis at 12% interest rate, the PW value for alternative 2 is closest to Alternative1 Alternative 2 Fiet cost, Annualco, per year Salvage value, 5 Lite, years -moo -15,000 25,000 A. $-193,075. B. S-219.060. C. S-189,225 D. S-172,388 (5 pts) The FW value of alternative 2 in the above table when performing a future worth evaluation over a study period of 8 years is closest to 4. A. S-383,375. B. S-408,375. C. S-320,433. D. S-603,245. 5. (5 pts) To make an item in-house, equipment costing $250,000 must be purchased. It will have a life of 4 years, an I cost of $80,000, and each unit will cost S40 to manufacture. Buying the item externally will cost $100 per unit. At i-| 5% per year, it is cheaper to make the tern in-house if the number per year needed is A. above 1047 units. B. above 2793 units. C. equal to 2793 units. D. below 2793 units. Incremental B/C when Compared 6. (5 pts) The four mutually exclusive alternatives shown are compared lt Alter. Cost, B/C Ratio with Alternative native $ millions v DNK L M using the B/C vs DN (do-nothing) method and incremental investment method. The alternative, if any, to select is 20 25 1.1 096 040 122 142 214- A. J .. C. L 45 039 072 030 0 Page 1 of 5

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