Reference no: EM132233649

Part 1:

QUESTION 1:
A company is considering three alternatives to replace an operation that is currently implemented manually. By performing annual worth analysis and assuming a MARR of 4%, which alternative is the best?

	Alternative A	Alternative B	Alternative C
Initial Cost	$1,000,000	$950,000	$800,000
Savings/year	$200,000	$250,000	$120,000
Life (years)	6	4	5

QUESTION 2:
A job can be done with Machine A that costs $12,500 and has annual end-of-year maintenance cost of $5,000. The salvage value of this machine after 3 years is $2000. Alternatively, the job can be done with Machine B, which costs $15,000 and has end-of-year maintenance cost of $4,000, and a salvage value of $1500 at the end of 4 years. Use annual worth analysis to the define the best alternative. The interest rate is 11%.

QUESTION 3:
Consider a project with the following cash flows:

End of Year (N)	Cash Flows ($)
0	-$22,000
1	$4,500
2	$12,670
3	$14,780
4	$13,650
5	$11,440
6	$7,800

A) At an interest rate of 18%, what is the discounted payback period?
B) What is the discounted payback period if the interest rate is 0%?

QUESTION 4:

Unit cost for brand X:

Unit cost for brand Y:

QUESTION 5:
Do problem 6.50 from your textbook. Use an interest rate of 15%.