Engineering economics/construction project management question

Engineering Economics/Construction Project Management Question

Your company is evaluating the three mutually exclusive mechanical systems shown in the table below. Using a MARR of 15%, which alternative should be chosen?

A	B	C
Investment	$110,000	$125,000	$138,000
Useful life	10 years	10 years	10 years
Total annual expenses	$53,800	$51,625	$45,033

	a.	Alternative C
	b.	Alternative A
	c.	Alternative B

1 points

QUESTION 2

You are analyzing six mutually exclusive alternatives using the IRR method. The useful life of each alternative is 10 years and the MARR is 10%. Cash flow information is given in Figures 1 & 2 below.

Figure 1. Total Cash Flows for each Alternative

	A	B	C	D	E	F
Capital Investment	$900	$1,500	$2,500	$4,000	$5,000	$7,000
Annual Revenues	150	276	400	925	1,125	1,425
IRR on total CF	10.6%	13.0%	9.6%	19.1%	18.3%	15.6%

Figure 2. Incremental Analysis using the IRR Method

	*∆(B – A)*	*∆(D – B)*	*∆(E – D)*	*∆(F – E)*
∆ Capital Investment	$600	$2,500	$1,000	$2,000
∆ Annual Revenues	$126	$649	$200	$300
∆ IRR	16.4%	22.6%	15.1%	8.1%

	a.	Alternative B
	b.	None of the above
	c.	Alternative D
	d.	Alternative A
	e.	Alternative E
	f.	Alternative F
	g.	Alternative C

1 points

QUESTION 3

Four mutually exclusive projects are shown below. Which, if any, of these projects should be selected? Please use an interest rate of 12%.

	Alt. A	Alt. B	Alt. C	Alt, D
Investment	$23M	$18M	$31M	$26M
Annual O&M	$1.8M	$1.2M	$2.1M	$2.0M
Salvage Value	$2.4M	$2.2M	$4.0M	$3.1M
Annual Benefits	$5.0M	$4.5M	$6.5M	$5.8M
Useful Life	50 years	50 years	50 years	50 years

	a.	Alt. C
	b.	Alt. A
	c.	Alt. D
	d.	None should be selected
	e.	Alt. B

Calculate the price of your order

Type of paper needed:

Pages:

550 words

Academic level:

We'll send you the first draft for approval by September 11, 2018 at 10:52 AM

Total price:

$26

The price is based on these factors:

Academic level

Number of pages

Urgency

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.