Table 8.1 Cash flows related to three mutually exclusive capital equipment projects are given in table below. \[\begin{array} { | l | l | l | } \hline \text { Altermative } & \text { Iritial Cost } & \text { Computed ROR } \\ \hline \text { A } & \$ 100,000 & 18 \% \\ \hline \mathrm { B } & \$ 200,000 & 15 \% \\ \hline \mathrm { C } & \$ 300,000 & 13 \% \\ \hline \end{array}\] -?RoR for the second increment (C-B) is ___________.

A) 10.2% B) 18.6% C) 14.67% D) 9.0% A) 10.2% B) 18.6% C) 14.67% D) 9.0% D

Given the financial data for four mutually exclusive alternatives in the table below, determine the best alternative using the incremental rate of return (?RoR) analysis. MARR =10%. \[\begin{array} { | l | l | l | l | l | } \hline & \text { A } & \text { B } & \text { C } & \text { D } \\ \hline \text { First cost } & \$ 15,000 & \$ 36,000 & \$ 21,200 & 45,000 \\ \hline \text { O \&M Cost/year } & 1,600 & 400 & 900 & 1,000 \\ \hline \text { Benefit/year } & 8,000 & 13,000 & 9,000 & 15,000 \\ \hline \text { Salvage value } & 3,000 & 6,000 & 4,600 & 10,000 \\ \hline \text { Life in years } &&& { 4 } \\ \hline \end{array}\]

A) Alt. A B) Alt. B C) Alt. C D) Alt. D A) Alt. A B) Alt. B C) Alt. C D) Alt. D B

Table 8.1 Cash flows related to three mutually exclusive capital equipment projects are given in table below. \[\begin{array} { | l | l | l | } \hline \text { Altermative } & \text { Iritial Cost } & \text { Computed ROR } \\ \hline \text { A } & \$ 100,000 & 18 \% \\ \hline \mathrm { B } & \$ 200,000 & 15 \% \\ \hline \mathrm { C } & \$ 300,000 & 13 \% \\ \hline \end{array}\] -?RoR for the increment (C- A) is ___________

A) 12.3% B) 10.5% C) 14.67% D) 15.5% A) 12.3% B) 10.5% C) 14.67% D) 15.5%

Table 8.1 Cash flows related to three mutually exclusive capital equipment projects are given in table below. \[\begin{array} { | l | l | l | } \hline \text { Altermative } & \text { Iritial Cost } & \text { Computed ROR } \\ \hline \text { A } & \$ 100,000 & 18 \% \\ \hline \mathrm { B } & \$ 200,000 & 15 \% \\ \hline \mathrm { C } & \$ 300,000 & 13 \% \\ \hline \end{array}\] -?RoR for the first increment (alt.B - alt.A) is ___________.

A) 10.2% B) 12% C) 14.67% D) 15.5% A) 10.2% B) 12% C) 14.67% D) 15.5%

Case Study 8 The cash flows for three mutually exclusive alternatives are given in table below. MARR = 4%. \[\begin{array} { | l | l | l | l | } \hline & \text { Alt. A } & \text { Alt. B } & \text { Alt. C } \\ \hline \text { Initial cost } & \$ 15,000 & 27,000 & 24,000 \\ \hline \text { Annual benefits } & \$ 4,500 & 7,600 & 6,500 \\ \hline \text { RoR } & 15 \% & 13 \% & 11 \% \\ \hline \text { Life in years } & & { 5 } \\ \hline \end{array}\] -Determine the ?RoR for the second increment (Alt. B - Alt.A) if A was retained during the first incremental analysis. ___________________.

A) 10.85% B) 8.12% C) 9.19% D) 5.78% A) 10.85% B) 8.12% C) 9.19% D) 5.78%

Case Study 8 The cash flows for three mutually exclusive alternatives are given in table below. MARR = 4%. \[\begin{array} { | l | l | l | l | } \hline & \text { Alt. A } & \text { Alt. B } & \text { Alt. C } \\ \hline \text { Initial cost } & \$ 15,000 & 27,000 & 24,000 \\ \hline \text { Annual benefits } & \$ 4,500 & 7,600 & 6,500 \\ \hline \text { RoR } & 15 \% & 13 \% & 11 \% \\ \hline \text { Life in years } & & { 5 } \\ \hline \end{array}\] -?RoR for the first increment (Alt. C-Alt. A) is ___________________.

A) 3.36% B) 3.09% C) 2.85% D) 3.62% A) 3.36% B) 3.09% C) 2.85% D) 3.62%

Case Study 8 The cash flows for three mutually exclusive alternatives are given in table below. MARR = 4%. \[\begin{array} { | l | l | l | l | } \hline & \text { Alt. A } & \text { Alt. B } & \text { Alt. C } \\ \hline \text { Initial cost } & \$ 15,000 & 27,000 & 24,000 \\ \hline \text { Annual benefits } & \$ 4,500 & 7,600 & 6,500 \\ \hline \text { RoR } & 15 \% & 13 \% & 11 \% \\ \hline \text { Life in years } & & { 5 } \\ \hline \end{array}\] -The best alternative for a MARR of 4.0% using the incremental rate of return analysis is ____________.

A) Alt. C B) Alt. A C) Alt. B D) Do nothing A) Alt. C B) Alt. A C) Alt. B D) Do nothing

Table 8.1 Cash flows related to three mutually exclusive capital equipment projects are given in table below. \[\begin{array} { | l | l | l | } \hline \text { Altermative } & \text { Iritial Cost } & \text { Computed ROR } \\ \hline \text { A } & \$ 100,000 & 18 \% \\ \hline \mathrm { B } & \$ 200,000 & 15 \% \\ \hline \mathrm { C } & \$ 300,000 & 13 \% \\ \hline \end{array}\] -Based on ?ROR analysis, the best alternative , for a MARR of =10%, is _________________.

A) Alt.A B) Alt.B C) Alt. C D) Do nothing A) Alt.A B) Alt.B C) Alt. C D) Do nothing

Exam 8: Choosing the Best Alternative

Table 8.1 Cash flows related to three mutually exclusive capital equipment projects are given in table below. Altermative Iritial Cost Computed ROR A \ 100,000 18\% \ 200,000 15\% \ 300,000 13\% -?RoR for the second increment (C-B) is ___________.

Free

(Multiple Choice)

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Question 1

Correct Answer:

Verified

D

Given the financial data for four mutually exclusive alternatives in the table below, determine the best alternative using the incremental rate of return (?RoR) analysis. MARR =10%. A B C D First cost \ 15,000 \ 36,000 \ 21,200 45,000 O \&M Cost/year 1,600 400 900 1,000 Benefit/year 8,000 13,000 9,000 15,000 Salvage value 3,000 6,000 4,600 10,000 Life in years 4

Free

(Multiple Choice)

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Question 2

Correct Answer:

Verified

B

Table 8.2 Given the financial data for three alternatives, find: A Initial cost \ 600 \ 1,200 \ 400 EUAB 196 70 LiFe 10Years RoR 6.1\% 10.1\% 11.7\% MARR = 8% ΔRoR (B-C) = 9.2% -For a MARR of over 11.7% the best alternative is "Do nothing."

Free

(True/False)

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Question 3

Correct Answer:

Verified

True

The cash flows for four mutually exclusive alternatives are provided in the table below. If the useful life is 10 years for each alternative, find the best alternative using incremental rate of return analysis. MARR = 10% P Q R Iritial Cost 19,000 16,000 11,000 8,500 EUAB 3,500 3,100 2,200 1,350

(Multiple Choice)

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Question 4

Table 8.1 Cash flows related to three mutually exclusive capital equipment projects are given in table below. Altermative Iritial Cost Computed ROR A \ 100,000 18\% \ 200,000 15\% \ 300,000 13\% -?RoR for the increment (C- A) is ___________

(Multiple Choice)

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Question 5

Table 8.1 Cash flows related to three mutually exclusive capital equipment projects are given in table below. Altermative Iritial Cost Computed ROR A \ 100,000 18\% \ 200,000 15\% \ 300,000 13\% -?RoR for the first increment (alt.B - alt.A) is ___________.

(Multiple Choice)

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Question 6

Case Study 8 The cash flows for three mutually exclusive alternatives are given in table below. MARR = 4%. Alt. A Alt. B Alt. C Initial cost \ 15,000 27,000 24,000 Annual benefits \ 4,500 7,600 6,500 RoR 15\% 13\% 11\% Life in years 5 -Determine the ?RoR for the second increment (Alt. B - Alt.A) if A was retained during the first incremental analysis. ___________________.

(Multiple Choice)

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Question 7

Case Study 8 The cash flows for three mutually exclusive alternatives are given in table below. MARR = 4%. Alt. A Alt. B Alt. C Initial cost \ 15,000 27,000 24,000 Annual benefits \ 4,500 7,600 6,500 RoR 15\% 13\% 11\% Life in years 5 -?RoR for the first increment (Alt. C-Alt. A) is ___________________.

(Multiple Choice)

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Question 8

Table 8.2 Given the financial data for three alternatives, find: A Initial cost \ 600 \ 1,200 \ 400 EUAB 196 70 LiFe 10Years RoR 6.1\% 10.1\% 11.7\% MARR = 8% ΔRoR (B-C) = 9.2% -For a MARR of 11 %, the most attractive is Alt. C.

(True/False)

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Question 9

Table 8.2 Given the financial data for three alternatives, find: A Initial cost \ 600 \ 1,200 \ 400 EUAB 196 70 LiFe 10Years RoR 6.1\% 10.1\% 11.7\% MARR = 8% ΔRoR (B-C) = 9.2% -The most attractive alternative for a MARR of 8% is Alt. C.

(True/False)

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Question 10

Case Study 8 The cash flows for three mutually exclusive alternatives are given in table below. MARR = 4%. Alt. A Alt. B Alt. C Initial cost \ 15,000 27,000 24,000 Annual benefits \ 4,500 7,600 6,500 RoR 15\% 13\% 11\% Life in years 5 -The best alternative for a MARR of 4.0% using the incremental rate of return analysis is ____________.

(Multiple Choice)

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Question 11

Table 8.1 Cash flows related to three mutually exclusive capital equipment projects are given in table below. Altermative Iritial Cost Computed ROR A \ 100,000 18\% \ 200,000 15\% \ 300,000 13\% -Based on ?ROR analysis, the best alternative , for a MARR of =10%, is _________________.

(Multiple Choice)

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Question 12

Table 8.1 Cash flows related to three mutually exclusive capital equipment projects are given in table below. Altermative Iritial Cost Computed ROR A \ 100,000 18\% \ 200,000 15\% \ 300,000 13\% -?RoR for the second increment (C-B) is ___________.

Table 8.2 Given the financial data for three alternatives, find: A Initial cost \ 600 \ 1,200 \ 400 EUAB 196 70 LiFe 10Years RoR 6.1\% 10.1\% 11.7\% MARR = 8% ΔRoR (B-C) = 9.2% -For a MARR of over 11.7% the best alternative is "Do nothing."

The cash flows for four mutually exclusive alternatives are provided in the table below. If the useful life is 10 years for each alternative, find the best alternative using incremental rate of return analysis. MARR = 10% P Q R Iritial Cost 19,000 16,000 11,000 8,500 EUAB 3,500 3,100 2,200 1,350

Table 8.1 Cash flows related to three mutually exclusive capital equipment projects are given in table below. Altermative Iritial Cost Computed ROR A \ 100,000 18\% \ 200,000 15\% \ 300,000 13\% -?RoR for the increment (C- A) is ___________

Table 8.1 Cash flows related to three mutually exclusive capital equipment projects are given in table below. Altermative Iritial Cost Computed ROR A \ 100,000 18\% \ 200,000 15\% \ 300,000 13\% -?RoR for the first increment (alt.B - alt.A) is ___________.

Table 8.2 Given the financial data for three alternatives, find: A Initial cost \ 600 \ 1,200 \ 400 EUAB 196 70 LiFe 10Years RoR 6.1\% 10.1\% 11.7\% MARR = 8% ΔRoR (B-C) = 9.2% -For a MARR of 11 %, the most attractive is Alt. C.

Table 8.2 Given the financial data for three alternatives, find: A Initial cost \ 600 \ 1,200 \ 400 EUAB 196 70 LiFe 10Years RoR 6.1\% 10.1\% 11.7\% MARR = 8% ΔRoR (B-C) = 9.2% -The most attractive alternative for a MARR of 8% is Alt. C.

Table 8.1 Cash flows related to three mutually exclusive capital equipment projects are given in table below. Altermative Iritial Cost Computed ROR A \ 100,000 18\% \ 200,000 15\% \ 300,000 13\% -Based on ?ROR analysis, the best alternative , for a MARR of =10%, is _________________.

Making Economic Decisions

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Interest and Equivalence

Equivalence for Repeated Cash Flows

Present Worth Analysis

Annual Cash Flow Analysis

Rate of Return Analysis

Other Analysis Techniques

Uncertainty in Future Events

Depreciation

Income Taxes for Corporations

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Inflation and Price Change

Selection of a Minimum Attractive Rate of Return

Economic Analysis in the Public Sector

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