Final Exam

Final Exam - MIME 2600 Engineering Economics Name Final...

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Name: ______________________________ Final Exam (100 Points) December 13, 2006 Show all work to receive full or partial credit. Problem #1 (20 points) Given the present worth data for 5 alternative public projects: Project A Project B Project C Project D Project E Benefits to Public $1000 $2000 $2500 $4000 $5000 Disbenefits to Public $200 $600 $500 $1000 $1000 Investment Costs $200 $800 $1000 $800 $1200 Operating Costs $200 $700 $500 $700 $1300 B/C Ratio a) Determine which projects would be acceptable based on benefit-cost analysis. b) Determine which project would be the best choice using incremental B/C analysis. Justify your answers. Problem #2 (20 points) A new machine is purchased for $200,000 and will result in $80,000 in annual savings for the three years it is used. The machine will be sold for $100,000 at the end of its third year of use. Determine the annual cash flows assuming a 5-year MACRS depreciation model and a 35% marginal tax rate. 0 1
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This note was uploaded on 05/04/2008 for the course MIME 2600 taught by Professor Lewandowski during the Spring '08 term at Toledo.

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Final Exam - MIME 2600 Engineering Economics Name Final...

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