Engineering economics/construction project management question

Engineering Economics/Construction Project Management Question

Connect with a professional writer in 5 simple steps

Please provide as many details about your writing struggle as possible

Academic level of your paper

Type of Paper

When is it due?

How many pages is this assigment?

Your company is evaluating the three mutually exclusive mechanical systems shown in the table below. Using a MARR of 15%, which alternative should be chosen?

A	B	C
Investment	$110,000	$125,000	$138,000
Useful life	10 years	10 years	10 years
Total annual expenses	$53,800	$51,625	$45,033

	a.	Alternative C
	b.	Alternative A
	c.	Alternative B

1 points

QUESTION 2

You are analyzing six mutually exclusive alternatives using the IRR method. The useful life of each alternative is 10 years and the MARR is 10%. Cash flow information is given in Figures 1 & 2 below.

Figure 1. Total Cash Flows for each Alternative

	A	B	C	D	E	F
Capital Investment	$900	$1,500	$2,500	$4,000	$5,000	$7,000
Annual Revenues	150	276	400	925	1,125	1,425
IRR on total CF	10.6%	13.0%	9.6%	19.1%	18.3%	15.6%

Figure 2. Incremental Analysis using the IRR Method

	*∆(B – A)*	*∆(D – B)*	*∆(E – D)*	*∆(F – E)*
∆ Capital Investment	$600	$2,500	$1,000	$2,000
∆ Annual Revenues	$126	$649	$200	$300
∆ IRR	16.4%	22.6%	15.1%	8.1%

	a.	Alternative B
	b.	None of the above
	c.	Alternative D
	d.	Alternative A
	e.	Alternative E
	f.	Alternative F
	g.	Alternative C

1 points

QUESTION 3

Four mutually exclusive projects are shown below. Which, if any, of these projects should be selected? Please use an interest rate of 12%.

	Alt. A	Alt. B	Alt. C	Alt, D
Investment	$23M	$18M	$31M	$26M
Annual O&M	$1.8M	$1.2M	$2.1M	$2.0M
Salvage Value	$2.4M	$2.2M	$4.0M	$3.1M
Annual Benefits	$5.0M	$4.5M	$6.5M	$5.8M
Useful Life	50 years	50 years	50 years	50 years

	a.	Alt. C
	b.	Alt. A
	c.	Alt. D
	d.	None should be selected
	e.	Alt. B