Can I got the answers for this 4 Problems Four problems, 25 pts each. Each probl

Question

Can I got the answers for this 4 Problems Four problems, 25 pts each. Each problem will be graded as follows: Correct final answer/conclusion: Correct problem formulation with cash flow tablediagram 25% Correct economic equations and solutions leading to the final answer 25% 50% * Problem1. A new alloy can be produced by Process A, which costs $200,000 to implement. The operating cost will be 10,000 per quarter with a salvage value of S25,000 after its 2-year life. Process B will have a first cost of $250,000, an operating cost of S 15,000 per quarter, and a S40.000 salvage value after its 4-year life. The interest rate is 8% per year compounded quarterly. What is the present value difference between A and B? (10 pts) ANALYSIS:

Explanation / Answer

For present worth method, both alternatives must have equal lives of 16 quarters (4-year life).Useidentical equipment replacement for process A at the end of 8th quarter (2-year) at 2% per quarter:

Present worth of process A:

PWA= -$200,000 - $200,000(P/F, 2%, 8) - $10,000(P/A, 2%, 16)+ $25,000(P/F, 2%, 8) + $25,000(P/F. 2%, 16)

= -$200,000(1 +.8535) - $10,000(13.578) + $25,000(1 + .7284)

= -$466,933

Present worth of process B:

PWB= -$250,000 - $15,000(P/A, 2%, 16) + $40,000(P/F. 2%, 16)

  = -$250,000 - $15,000(13.578) + 40,000(.7284)

= -$424,534

PW of cost of process B is less than PW of cost of process A

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