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Posted on Jul 11, 2024

Question 1: What is alpha's net present value? what is beta's net present value? gamma's net future worth at EOY 4? beta's annual equivalent worth?

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Question 1:

What is alpha's net present value?
what is beta's net present value?
gamma's net future worth at EOY 4?
beta's annual equivalent worth?
alpha's AEW over 20 years (as it was repeated several times)?
the best precision equipment based on the NPV method?
the best precision equipment based on the AEW method?
gamma's recovery period (tears) based on simple payback method?
Alpha's "project balance" after 2 years based on the simple payback method?

B. Problems and Questions Delta Company is considering the production and sale of new precision equipment. The key parameters of the three types of precision equipment under scrutiny by Delta Company are shown below (Please note that all parameter values and equipment names are fictitious). Alpha Beta Gamma Parameters 1. Initial Cost ($) 260,000 295,000 2. Revenues 240,000 158,000 at EOY1 increasing by $3,000 annually thereafter 90,000 at EOY1 increasing by 1% annually thereafter 175,000 at EOY1 decreasing by 0.5% annually thereafter. 175,000 at EOY1 increasing by 1.0% annually thereafter. 3. Operating costs ($) 122,000 at EOY1 decreasing by $1,000 annually thereafter 120,000 at EOY1 to EOY5 inclusively; $110,000 from EOY6 to EOY10 inclusively. 50,000 40,000 -20,000 4. End-of-life salvage value ($) 5. Useful life (years) 10 5 10 All parameter values are fictitious. EOY = End-of-year Industry Standard = 3 years MARR = 10% . . DISCRETE CASH FLOWS AND DISCRETE COMPOUNDING 10.00 % DISCRETE RATE OF INTEREST i% = 0.1000 k% = 0.1200 n (F/P,1%,n) (P/F,i%,n) (A/P,i%,n) (P/A,i%,n) (A/F,i%,n) (F/A,i%,n) (A/G,i%,n) (P/G,i%,n) (F/G,i%,n) (P/C.i.k.N) i #k 1 1.1000 1.2100 0.9091 1.7355 1.0000 0.4762 1.0000 2.1000 2 1.1000 0.5762 0.4021 0.3155 3 2.4869 0.3021 4 0.2155 0.0000 0.4762 0.9366 1.3812 1.8101 2.2236 2.6216 5 6 0.9091 0.8264 0.7513 0.6830 0.6209 0.5645 0.5132 0.4665 0.4241 0.3855 0.3505 0.3186 7 1.3310 1.4641 1.6105 1.7716 1.9487 2.1436 2.3579 2.5937 2.8531 3.1384 3.4523 3.7975 4.1772 4.5950 8 0.2638 0.2296 0.2054 0.1874 0.1736 0.1627 0.1540 0.1468 9 3.3100 4.6410 6.1051 7.7156 9.4872 11.4359 13.5795 15.9374 18.5312 21.3843 24.5227 27.9750 0.1638 0.1296 0.1054 0.0874 0.0736 0.0627 0.0540 0.0468 0.0408 0.0357 0.9091 1.8347 2.7772 3.7367 4.7138 5.7086 6.7215 7.7528 8.8028 9.8719 10.9605 12.0689 13.1974 14.3465 3.1699 3.7908 4.3553 4.8684 5.3349 5.7590 6.1446 6.4951 6.8137 7.1034 7.3667 7.6061 7.8237 8.0216 8.2014 8.3649 8.5136 10 0.0000 0.8264 2.3291 4.3781 6.8618 9.6842 12.7631 16.0287 19.4215 22.8913 26.3963 29.9012 33.3772 36.8005 40.1520 43.4164 46.5819 49.6395 52.5827 55.4069 3.0045 3.3724 3.7255 4.0641 4.3884 0.0000 1.0000 3.1000 6.4100 11.0510 17.1561 24.8717 34.3589 45.7948 59.3742 75.3117 93.8428 115.2271 139.7498 167.7248 199.4973 235.4470 275.9917 321.5909 372.7500 (P/C,i,k,N) i=k 0.9091 1.8182 2.7273 3.6364 4.5455 5.4545 6.3636 7.2727 8.1818 9.0909 10.0000 10.9091 11.8182 12.7273 13.6364 14.5455 15.4545 16.3636 17.2727 18.1818 11 12 13 0.2897 0.1408 14 0.2633 15 0.1357 0.1315 0.1278 0.1247 0.2394 0.2176 0.1978 0.0315 0.0278 31.7725 35.9497 4.6988 4.9955 5.2789 5.5493 5.8071 16 15.5164 16.7076 17.9205 17 18 5.0545 5.5599 6.1159 6.7275 0.1799 0.1635 0.1486 0.0247 0.0219 0.0195 0.0175 0.1219 0.1195 0.1175 19 20 40.5447 45.5992 51.1591 57.2750 6.0526 6.2861 6.5081 19.1554 20.4128 21.6930 B. Problems and Questions Delta Company is considering the production and sale of new precision equipment. The key parameters of the three types of precision equipment under scrutiny by Delta Company are shown below (Please note that all parameter values and equipment names are fictitious). Alpha Beta Gamma Parameters 1. Initial Cost ($) 260,000 295,000 2. Revenues 240,000 158,000 at EOY1 increasing by $3,000 annually thereafter 90,000 at EOY1 increasing by 1% annually thereafter 175,000 at EOY1 decreasing by 0.5% annually thereafter. 175,000 at EOY1 increasing by 1.0% annually thereafter. 3. Operating costs ($) 122,000 at EOY1 decreasing by $1,000 annually thereafter 120,000 at EOY1 to EOY5 inclusively; $110,000 from EOY6 to EOY10 inclusively. 50,000 40,000 -20,000 4. End-of-life salvage value ($) 5. Useful life (years) 10 5 10 All parameter values are fictitious. EOY = End-of-year Industry Standard = 3 years MARR = 10% . . DISCRETE CASH FLOWS AND DISCRETE COMPOUNDING 10.00 % DISCRETE RATE OF INTEREST i% = 0.1000 k% = 0.1200 n (F/P,1%,n) (P/F,i%,n) (A/P,i%,n) (P/A,i%,n) (A/F,i%,n) (F/A,i%,n) (A/G,i%,n) (P/G,i%,n) (F/G,i%,n) (P/C.i.k.N) i #k 1 1.1000 1.2100 0.9091 1.7355 1.0000 0.4762 1.0000 2.1000 2 1.1000 0.5762 0.4021 0.3155 3 2.4869 0.3021 4 0.2155 0.0000 0.4762 0.9366 1.3812 1.8101 2.2236 2.6216 5 6 0.9091 0.8264 0.7513 0.6830 0.6209 0.5645 0.5132 0.4665 0.4241 0.3855 0.3505 0.3186 7 1.3310 1.4641 1.6105 1.7716 1.9487 2.1436 2.3579 2.5937 2.8531 3.1384 3.4523 3.7975 4.1772 4.5950 8 0.2638 0.2296 0.2054 0.1874 0.1736 0.1627 0.1540 0.1468 9 3.3100 4.6410 6.1051 7.7156 9.4872 11.4359 13.5795 15.9374 18.5312 21.3843 24.5227 27.9750 0.1638 0.1296 0.1054 0.0874 0.0736 0.0627 0.0540 0.0468 0.0408 0.0357 0.9091 1.8347 2.7772 3.7367 4.7138 5.7086 6.7215 7.7528 8.8028 9.8719 10.9605 12.0689 13.1974 14.3465 3.1699 3.7908 4.3553 4.8684 5.3349 5.7590 6.1446 6.4951 6.8137 7.1034 7.3667 7.6061 7.8237 8.0216 8.2014 8.3649 8.5136 10 0.0000 0.8264 2.3291 4.3781 6.8618 9.6842 12.7631 16.0287 19.4215 22.8913 26.3963 29.9012 33.3772 36.8005 40.1520 43.4164 46.5819 49.6395 52.5827 55.4069 3.0045 3.3724 3.7255 4.0641 4.3884 0.0000 1.0000 3.1000 6.4100 11.0510 17.1561 24.8717 34.3589 45.7948 59.3742 75.3117 93.8428 115.2271 139.7498 167.7248 199.4973 235.4470 275.9917 321.5909 372.7500 (P/C,i,k,N) i=k 0.9091 1.8182 2.7273 3.6364 4.5455 5.4545 6.3636 7.2727 8.1818 9.0909 10.0000 10.9091 11.8182 12.7273 13.6364 14.5455 15.4545 16.3636 17.2727 18.1818 11 12 13 0.2897 0.1408 14 0.2633 15 0.1357 0.1315 0.1278 0.1247 0.2394 0.2176 0.1978 0.0315 0.0278 31.7725 35.9497 4.6988 4.9955 5.2789 5.5493 5.8071 16 15.5164 16.7076 17.9205 17 18 5.0545 5.5599 6.1159 6.7275 0.1799 0.1635 0.1486 0.0247 0.0219 0.0195 0.0175 0.1219 0.1195 0.1175 19 20 40.5447 45.5992 51.1591 57.2750 6.0526 6.2861 6.5081 19.1554 20.4128 21.6930