Economics for Engineering
1- The initial cost of an alternative is $3,000,000. Revenues are $500,000 at the end of the first year decrease by 2% per year for the next 14 years. the useful life is 15 years. the MARR is 18 %. using future worth, is this good alternative?
2- Consider an alternative with following cash flows. Using IRR, is this a good alternative?
Initial cost $3,000,000 Annual Expeses $80,000 Annual Revenues $750,000
Salvage Value $100,000 Useful life 6 years MARR 10 %
3- Consider an alternative with the following cash flows. Using ERR, is this a good alternative?
Capital Investment $45,000 Annual Expenses $2000
Market Value $45000 Useful life 10 years
Revenues $5000 at the end of the first year increasing by $2000 per year for the next 9 years.
MARR 10%