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Hello, I've been working this question on Life Cycle Analysis and Present Values in Engineering Economy. I want to figure out how to do this
Hello,
I've been working this question on Life Cycle Analysis and Present Values in Engineering Economy. I want to figure out how to do this question via Excel functions, I presume it's using:
" = NPV " or " = PV " perhaps I'm wrong
My answers is slightly off from the responses given on this assignment, the correct answer is highlighted. Please use Excel solutions only:
Cash flows of two mutually exclusive projects are as follows. Project A costs $80,000 initially and will have a $15,000 salvage value after 3 years. The operating cost with this method will be $30,000 per year. Project B has initial cost of $120.000, an operating cost of $8,000 per year, and a $40,000 salvage value after its 3-year life. Assume the interest rate is 12% per year. Which of the following statements is true? The present worth of project B is -$110.743.44. The present worth of project A is -$141,252.17. Project A should be selected. Two projects have different life cycle. G13 =NPV(B13,67:910)+G6 A B C D E H 1 Life Cycle Analysis: PW 2 3 4 5 Project A $80,000 Project B $120,000 6 Initial Cost 7 Project A Project B ($80,000) ($120,000) ($30,000) ($8,000) ($30,000) ($8,000) ($30,000) ($8,000) $15,000 $40,000 8 Salvage Value $15,000 $40,000 9 10 Operating cost $30,000 $8,000 11 12 Int Rate 13 0.12 ($142,522.17) ($113,793.93) 14 15 Life Time (Years) 16 3 17
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