A constructionengineer has been asked to recomment an excavator for acquisition. Three alternatives have been identified,...
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A constructionengineer has been asked to recomment an excavator for acquisition. Three alternatives have been identified, having the characteristics shown in the following table. (MARR=12%) Investment Excavator Alternative A B Useful life 4 years 5 years 6 years $15,500 $20,250 $30,750 Annual operation cost $8,750 $5,850 $3,175 Terminal salvage value $2,500 $3,000 $3,250 a) Apply present worth analysis. b) Use shortest life to establish the planning horizon's length and apply present woth analysis again. c) Use longest life to establish the planning horizon's length and apply present woth analysis once more. d) Repeat PW analysis for 10 years standard analysis period. e) Consider an infinitely long planning period and calculate the annual worth for each investment alternatives. A constructionengineer has been asked to recomment an excavator for acquisition. Three alternatives have been identified, having the characteristics shown in the following table. (MARR=12%) Investment Excavator Alternative A B Useful life 4 years 5 years 6 years $15,500 $20,250 $30,750 Annual operation cost $8,750 $5,850 $3,175 Terminal salvage value $2,500 $3,000 $3,250 a) Apply present worth analysis. b) Use shortest life to establish the planning horizon's length and apply present woth analysis again. c) Use longest life to establish the planning horizon's length and apply present woth analysis once more. d) Repeat PW analysis for 10 years standard analysis period. e) Consider an infinitely long planning period and calculate the annual worth for each investment alternatives.
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To analyze the excavator alternatives using present worth analysis we need to calculate the present worth PW of each alternative The present worth is ... View the full answer
Related Book For
Fundamentals Of Momentum Heat And Mass Transfer
ISBN: 9781118947463
6th Edition
Authors: James Welty, Gregory L. Rorrer, David G. Foster
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