ENGR450 Engineering Economy 2017 FAISAL ALKATHR Homework: Chapter 6.2 Score: 0 o
ID: 1714275 • Letter: E
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ENGR450 Engineering Economy 2017 FAISAL ALKATHR Homework: Chapter 6.2 Score: 0 of 1 pt Problem 6-7 (algorithmic) HW Score: 0%, 0 of 4 pt Question Hep * Three mutualy exclusive design atematives are being considered The the end of the useful lide, the inves recommendation using the PW method estrated cash fows for each antve ae gm belo. The MARRi, 25% per yur Ar ment w be sold Adecson-maker can select oe of these alternatives or decide to select none ofthem Make a $27000 $$6,000 $37 500 15000 $13 000 $1,000 23.000 $30 $5,500 10 years 10 years 10 years Annual expenses Market value Useful Iife IRR 7 500 $11.000 27,5% 288% 21 5% Okk to con to view te merest rd muty ttie for discrete componing when The PWofalematveAaS Rondtof. nearest dolar i 25% per year Enter your answer in the answer box and then cick Check AnswerExplanation / Answer
A B C Additional revanue 8000 17000 9000 (Revanue - cost) PVAF(25%,10) 6.1446 6.1446 6.1446 PV of annual cash flows (i) 49156.54 104457.6 55301.1 Salvage value 8500 7500 11000 PV Factor for 10th year @ 10% 0.385543 0.385543 0.385543 PV of salvage value (ii) 3277.118 2891.575 4240.976 PV of cash inflows - (i) + (ii) 52433.65 107349.2 59542.08 Less: Cash out flow 27000 56000 37500 NPW (Inflow - Outflow) 25433.65 51349.22 22042.08 Option B is better with highest PW Please provide feedback…. Thanks in advance…. :-)
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