What is the discounted payback period

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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%.

Reference no: EM132233649

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