Solve by incremental cashflow then PW = 0. To get the value of i by interpolation.Problem 3:Two plans for a hydroelectric project in Peru have been proposed. The opportunitycost, in soles, of resources is 10 percent. Data on the two alternatives are:SystemFirst cost ($/,000,000,000)300160Economic life (years)4020Salvage value ($/,000,000,000)1512Annual benefits (S/.000,000,000)2522Annual costs ($/,000,000,000)31Using the internal rate of return method, which of the two systems should be chosenor should either be selected?

Internal rate of return (IRR) refers to the discount rate of a project wherein its net present value…

Problem 3: Two plans for a hydroelectric project in Peru have been proposed. The opportunity cost, in soles, of resources is 10 percent. Data on the two alternatives are: System First cost ($/,000,000,000) Economic life (years) Salvage value ($/.000,000,000) 300 160 40 20 15 12 25 22 3 1 Annual benefits (S/.000,000,000) Annual costs ($/,000,000,000) Using the internal rate of return method, which of the two systems should be chosen or should either be selected?

Problem 3: Two plans for a hydroelectric project in Peru have been proposed. The opportunity cost, in soles, of resources is 10 percent. Data on the two alternatives are: System First cost ($/,000,000,000) Economic life (years) Salvage value ($/.000,000,000) 300 160 40 20 15 12 25 22 3 1 Annual benefits (S/.000,000,000) Annual costs ($/,000,000,000) Using the internal rate of return method, which of the two systems should be chosen or should either be selected?

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter17: Long-term Investment Analysis

Section: Chapter Questions

Problem 10E

See similar textbooks

Similar questions

True/False AVC can fall even when MC is rising
Graph on right, shows AW of costs versus number of service years of project X. Based on the graph, economic service life of the project is Larger costs Total AW of costs AW of AOC Capital recovery 3.5 10 Years О 3.5 years O 10 years O 1 year О З уears AW of costs, S/year
Need answe for Part D and E
only D part neededdetails and correct answer Only
Subject: Engineering Economics An earth compactor costs Rs. 2,00,000 and has an economic life of 9 years. However, the purchaser needs it for only one project that will be completed in 3 years. At the end of the project, it can be sold for one-half its purchase price. What is the annual cost to the owner, if the required rate of return is 12 percent.
Submit your complete handwritten solution with graph. The Gigadigit Manufacturing Inc. is considering to produce a new product. The following data have been provided to managemer Sales price $17.50/unit Equipment cost $250,000 Incremental overhead cost $50,000/year Sales and marketing cost S150,000/year Operating and maintenance cost $25/operating hour Production time/1,000 units 100 hours Packaging and shipping cost S0.50/unit Planning horizon 5 years Minimum attractive rate of return 15% The managers would like to know the viability of this product and how it would roll out in sales. (a) To give them basis and insight what is the break-even value of units that must be sold annually to keep the product viable? (b) If the target revenue is from 30,000 units sold, what is the expected profit? (C) If the profit drops by 13% due to equipment replacement, how much must have been the cost of the alternative equipment? (d) Provide graph for (a)
Define the negative cash flow?
PLABOR МIC $7.00 -S $5.25 $4.50 MVP QLABOR 1000 1500
NEEE33333DD INNN30 MINUTES
Economics URGENT PLEASE** As a PMO officer, you are asked to do an evaluation for a natural gas pipeline right in the middle of the project’s planned schedule. There are concerns that it will go over budget and schedule because 40 million dollars has been spent in the project so far. According to the project charter, the pipeline length is 72 km and must be completed in 6 months, with a budget of 57.6 million AUD. You performed an inspection and find out that installation of 30 km of pipeline has been completed. Using earned value analysis, answer the following questions: A) What is the earned value (EV) for this project at the time of inspection (month 3)? B) What is the planned value (PV) for this project at the time of inspection? C) Calculate the Schedule variance (SV) and the cost variance (CV) at month 4. What do they mean? D) Calculate the Schedule performance index (SPI) and the cost performance index (CPI) at the time of inspection. What do they mean? [ E) According to your…
Economics URGENT PLEASE** As a PMO officer, you are asked to do an evaluation for a natural gas pipeline right in the middle of the project’s planned schedule. There are concerns that it will go over budget and schedule because 40 million dollars has been spent in the project so far. According to the project charter, the pipeline length is 72 km and must be completed in 6 months, with a budget of 57.6 million AUD. You performed an inspection and find out that installation of 30 km of pipeline has been completed. Using earned value analysis, answer the following questions: A ) Calculate the Schedule performance index (SPI) and the cost performance index (CPI) at the time of inspection. What do they mean? [ B) According to your analysis, how much is the project going to be over budget? (Calculate the estimate to completion (ETC).) C) As a key part in your report to the management, what is your advice for cutting the expenditure in the rest of the project, in order to finish the…
Suppose you are offered two options: (i) receive Taka 30,000 at the end of 5 years or (ii) receive Taka P today and another Taka P 2 year later. When you invest the P Taka in ecommerce it pays around 8% profit yearly. What value of P would be same as promise of Taka 30,000 after 5 years? Assume there is no risk in this future payment.