Alternative has life cycle cost associated-expected future

Reference no: EM13310972

The design of a system is to be pursued from one of the available alternatives. Each alternative has a life cycle cost associated with an expected future. The costs for the corresponding futures are given in the following table (in millions of dollars). If the probabilities of occurrence of the futures are 30%, 50% and 20% respectively which alternative is most desirable from an expected cost viewpoint? Assume interest 10%.

Design 1 Years

Future 1 2 3 4 5 6 7 8 9 10 11 12

Optimistic 0.4 0.6 5.0 7.0 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8

Expected 0.6 0.8 1.0 5.0 10.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0

Pessimistic 0.8 0.9 1.0 7.0 10.0 1.2 1.2 1.2 1.2 1.2 1.2 1.2

Design 2 Years

Future 1 2 3 4 5 6 7 8 9 10 11 12

Optimistic 0.4 0.4 0.4 1.0 3.0 2.5 2.5 2.5 2.5 2.5 2.5 2.5

Expected 0.6 0.8 1.0 3.0 6.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0

Pessimistic 0.6 0.8 1.0 5.0 6.0 3.1 3.1 3.1 3.1 3.1 3.1 3.1

Reference no: EM13310972

Questions Cloud

Change in temperature in the steam generator : Assuming that the change in temperature in the steam generator is linear with power (40% power equals a 40 degree change in temperature), what happens to the Average Coolant Temperature immediately after steam demand is reduced to 30%?

In purchasing health insurance : In purchasing health insurance, which of the following is NOT typically a consideration?

The reactor is operating : The reactor is operating at 40% power. Under current conditions, the water leaving the core is at 400 degrees Fahrenheit, passes through the Steam Generator, and enters the core at 360 degrees Fahrenheit.

Public nutrition program : Traditionally, nutrition programs were targeted to the indigent and poor populations in developing countries. Many of today's Americans are malnourished also, but they are glutted with a wealth of unhealthy foods and require a multidisciplinary appro..

Alternative has life cycle cost associated-expected future : The design of a system is to be pursued from one of the available alternatives. Each alternative has a life cycle cost associated with an expected future. The costs for the corresponding futures are given in the following table (in millions of dollar..

Equilibrium wage to increase : Identify all of the following factors that would cause the equilibrium wage to increase.

Closed chamber with dry nitrogen : The volume of a dry box (a closed chamber with dry nitrogen flowing through it) is 2.0 m^3. The dry box is maintained at a slight positive gauge pressure of 10 cm H20 and room temperature (25 C). If the contents of the box are to be replaced every fi..

Distances of the various stars : The stars you see in the night sky cover a large range of brightness. What does that tell you about the distances of the various stars?

Expected efficiency of detector for thermal neutrons : Calculate the expected efficiency of the detector for thermal neutrons of 25meV.

User Account

All Pages