PS 10 - Cost Only Alternatives, Incremental Analysis

PS 10 - Cost Only Alternatives, Incremental Analysis - IE...

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Unformatted text preview: IE 150 Problem Set 10 Cost Only Alternatives and Incremental Analysis Instructions: Write/Type/Print your answers on yellow pad or bond paper (NO A4s). Use a different sheet per problem. Use phrases to describe what you are doing. Do not present it as just a series of equations and numbers. Label each step. Ex: Step 1: Set-up the Total Revenue Equation, Step 4: Solve for the NPV. Box the final answers. Use clear formatting: Indent at each step. Show your answers in just 1 column. (The problem set will be read from top to bottom, and not top bottom diagonal right bottom.) Problem 1: Estimates for a proposed small public facility are as follows. Plan A has a first cost of $50,000 and a life of 25 years, a $5,000 market value, and annual maintenance expenses of $1,200. Plan B has a first cost of of 25 years, a $5,000 market value, and annual maintenance expenses of $1,200....
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