Engineering Economic Analysis

Graphical Solutions 251 At 6%, (PW of benefits) = (Uniform annual benefit) x (Series present worth factor). PW of benefits=(Unif ...

252 INCREMENTALANALYSIS Alt.A':PW of benefits =122(P/A,6%, 20) = 122(11.470) = 1399 The revised plot of the three alternatives ( ...

Incremental Rate of Return Analysis 253 SolveExample 8-1 mathematically.With two mutually exclusive alternatives and a 6% MARR, ...

1 254 INCREMENTALANALYSIS Alternative B 4000 =639(PIA, i, 20) 4000 (PIA, i,20) = _ 639 =6.259 i=15% Alternative C 5000 =700(PI A ...

_ ,_ _"_,, 'U' ,__ Elements in Incremental Rate of Return Analysis CONTENTS xi 1000 =61(PIA, i, 20) 1000 ~IRR (PIA, i,20)= 61 2. ...

256 INCREMENTAL ANALYSIS SOLUTION We see that the rate of return for each alternative equals or exceeds the MARR, therefore, no ...

Elements in Incremental Rate of Return Analysis 257 FIGURE 8-8 Benefit-cost .6% graph for Example 8-8 data. o $1000 $3000 $5 ...

258 INCREMENTALANALYSIS alternatives.In an exam, this step probably should be skipped,but in less pressing situations, these are ...

Elements in Incremental Rate of Return Analysis 259 A careful analysis has been made of the consequences of constructing a dam i ...

260 INCREMENTALANALYSIS Present Worth Analysis with Benefit cost .Graphs Any of the example problems presented so far in this ch ...

Choosing an Analysis Method c A $3000 $5000 $7000 PresentWorthof Cost FIGURE 8-11 Present worth analysis of Example 8-8 using a ...

262 INCREMENTAL ANALYSIS feasible situations. Ironically,the most difficultmethod-rate of return analysis-is the one most freque ...

Summary FIGURE 8-12b Spreadsheet after GOAL SEEK. The incremental IRR found by GOAL SEEK is 14.52%. .... Summary A graph of the ...

264 INCREMENTALANALYSIS PROBLEMS Unless otherwise noted, all problems for Chapter 8 should be solved by rate of return analysis. ...

Problems 265 Plan Cost of Borrowed Money Improyements. Type of Business A $ 75,000 Conventional gas station with service facilit ...

266 INCREMENTAL ANALYSIS 8-11 Consider three mutually exclusive alternatives: Year o 1 2 3 4 Do Nothing o o o o o BuyX -$100.0 + ...

;' meters, in which case the monthly rent would be $1000 a mont;h. Further, Tyre could cease renting warehouse space entirely. T ...

268 INCREMENTALANALYSIS selling below their stated value (in other words, junk bonds), Both bonds are rated as equally risky. Wh ...

---TOO- .-- --. - .-. Problems 269 Using an MARR of 15% and a rate of return analysis, which alternative, if any, should be se ...

After Completing This Chapter... The student should be able to:. .Use future worth, benefit-cost ratio, payback period, and sens ...