Chapter_10_solutions

# Chapter_10_solutions - Problems 1 3 and 4 were in fact very...

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Problems 1, 3 and 4 were in fact very unclear. There is no particular solution for those problems (not in the way they were worded), therefore they were graded based on the correctness of each particular attempt. Problems for tonight’s quiz will not involve problems 1, 3 or 4 from this homework. 2. Using Equivalent Uniform Annual Cost Analysis and assuming replacement for Option 2. Option 1: EUAC = 25,000(A|P, 6%, 10) EUAC = 3,397.5 Option 2: EUAC = 25,000(A|P, 6%, 5) 6250(.06) EUAC = 5,497.5 Therefore Option 1 is more favorable. 5. Internal Rate of return 28.6% n (P|F, I, n) F P 0 1 -300 -300 1 0.777604977 -100 -77.7604976 2 0.6046695 100 60.46694997 3 0.470194012 200 94.03880245 4 0.365625204 300 109.6875612 5 0.284311978 400 113.7247913 Sum 0.157607199 Therefore the rate of return for this cash flow is 28.6%

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6. a) 10,000 – (390)/i = 0 i = 3.9% For part b) this goes on for 100 repetitions i = 3.976% For part c) i = 3.23% d) He should buy the water treatment if he cannot get a MARR higher than the
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## This note was uploaded on 02/03/2009 for the course BEE 489 taught by Professor Timmons during the Spring '09 term at Cornell.

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Chapter_10_solutions - Problems 1 3 and 4 were in fact very...

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