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Author Archives: Anonymous

TheCo is considering two projects. Project A requires an inv…

TheCo is considering two projects. Project A requires an investment of $53,100. Estimated annual receipts for 20 years are $20,500; estimated annual costs are $12,620. An alternative project, B, requires an investment of $77,900, has annual receipts for 20 years of $28,460, and has annual costs of $18,300. Assume both projects have zero salvage value and that MARR is 12%/year. What is the annual worth of the recommended project?

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TheCo is considering two projects, and must do one of them….

TheCo is considering two projects, and must do one of them. Project A requires an investment of $63,700. Estimated annual receipts for 20 years are $22,600; estimated annual costs are $14,600. An alternative project, B, requires an investment of $69,700, has annual receipts for 20 years of $33,900, and has annual costs of $18,800. Assume both projects have a zero salvage value and that MARR is 16%/year. What is the FW of the recommended project at the end of the period of analysis?

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Your company must purchase a machine to build the products i…

Your company must purchase a machine to build the products it produces. Note that doing nothing is not an option. There are two options: it could purchase Machine A which costs $69,700 initially; $13,900 to operate annually; and has a salvage value of $5,750 at the end of 5 years. Alternatively, it could purchase Machine B which costs $128,500 initially; $5,600 to operate annually; and has a salvage value of $19,300 at the end of 5 years. Conduct a future worth analysis, assuming a MARR of 9%. What is the FW (at the end of the period of analysis) of the cost associated with the recommended alternative? Enter your answer as a positive number, as the question is already asking for the cost. 

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Your company must purchase a machine to build the products i…

Your company must purchase a machine to build the products it produces. Note that doing nothing is not an option. There are two options: it could purchase Machine A which costs $71,400 initially; $13,500 to operate annually; and has a salvage value of $5,300 at the end of 5 years. Alternatively, it could purchase Machine B which costs $122,800 initially; $5,900 to operate annually; and has a salvage value of $18,720 at the end of 5 years. Conduct a future worth analysis, assuming a MARR of 10%. What is the FW (at the end of the period of analysis) of the cost associated with the recommended alternative? Enter your answer as a positive number, as the question is already asking for the cost. 

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The minimum attractive rate of return (MARR) is 9%. Consider…

The minimum attractive rate of return (MARR) is 9%. Consider the information provided in the following table:  EOY  X  Y  0  -$4,490.00  -$3,625.00  1  -$880.00  $1,185.00  2  $2,295.00   $1,185.00   3  $2,295.00   $1,185.00   4 $2,295.00   $1,185.00     What is the internal rate of return of the incremental investment? Enter the IRR using two (2) significant decimal digits, i.e., X.xx or XX.xx.

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Considering the computed PW for the medical dispensing cabin…

Considering the computed PW for the medical dispensing cabinet in Question 1, should the hospital invest in this medical dispensing cabinet?

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Best Bakery (BB) is considering purchasing a new van to deli…

Best Bakery (BB) is considering purchasing a new van to deliver their product. The van will cost $24,600. Sixty (60) percent of this cost will be borrowed. The loan is to be repaid with four equal annual payments (first payment at t = 1) based on an interest rate of 8%/year. It is anticipated that the van will be used for 6 years and then sold for a salvage value of $7,400. Annual operating and maintenance expenses for the van over the 6-year life are estimated to be $790 per year. If the van is purchased, BB will realize a cost savings of $3,300 per year. BB uses a MARR of 10%/year. What is the present worth of the van?

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A county will invest $4,700,000 to clean up a chemical spill…

A county will invest $4,700,000 to clean up a chemical spill that occurred following a natural disaster. At the end of the 10-year planning horizon, an additional $1,500,000 will be spent on restoring the site to an environmentally acceptable condition. The investment is expected to produce net annual benefits that will decrease by 28% each year. The net annual public benefit in the 1st year is estimated at $2,560,000. The MARR is 11%. What is the B/C ratio for this project? Express the B/C ratio using two (2) significant decimal digits, i.e., X.xx or XX.xx. Your B/C should be a positive number.

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Consider question 13. Should the organization move forward w…

Consider question 13. Should the organization move forward with this investment (Yes/No)?

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A flood control project at Flat Valley dam is projected to c…

A flood control project at Flat Valley dam is projected to cost $2,340,000 today, have annual maintenance costs of $56,900, and have major inspection and upkeep after each 5-year interval costing $275,000. If the interest rate is 13%/year, what is the capitalized cost?

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