Question 1

A mixing process for a laboratory-grade sodium phosphate has an estimated initial investment of $450,000 with annual cost of $40,000. Income is expected to be $115,000 per year. What is the payback period at i= 0% per year?

Question 1 options:

	It will never payoff
	6 years
	8 years
	4 years

Question 2

The four alternatives described below are being evaluated. If the alternatives are independent and there is no budget limitation, which alternative(s) should be selected based on the B/C analysis?

Alternative	Total Cost in Millions($)	B/C Ratio	Incremental B/C when compared with alternative
			A		B	C	D
A	50	1.50
B	55	0.85	0.55
C	60	1.30	1.40		3.50
D	65	0.70	0.65		0.80	0.05

Question 2 options:

	Select only C
	Select only A
	Select A and C
	Select A, B, C, and D

Question 3

*Two systems are under consideration. The relevant costs for each system are known or estimated (see table below). Use an interest rate of 8% per year to determine the minimum resale price (RV) needed to make the challenger a better economic choice now.

Calculations based on interest factors with 5 decimal places.

Question 3 options:

	RV= $1,177,833
	RV= $379,302
	RV= $778,578
	RV= $389,520

Current System New System Remaining life, (years) Current market value, ($) AOC, ($ per year) Future salvage, ($) AW New System, ($ per year) 50,000 -100,000 -195,000