Answer Happy

You may work these problems by hand, using either the formulas or interest factors from the FE handbook, or in Excel. (If you use Excel. please highlight your answers on a single worksheet) 1. Using the data given below, choose the most economic alternative for transporting petroleum, using PRESENT WORTH ANALYSIS. The interest rate is 2% annually. Alternative Rail Initial Cost $40M Annual Cost $800K Salvage None Useful Life A long time 50 years 2. Using the data given below, choose the most economic alternative using REPEATED CASH FLOW ANALYSIS. The interest rate is 6% annually, compounded monthly. Alternative A B Initial Cost $40,000 $20,000 Net Monthly $8,000 $7,800 Profit Salvage $4,000 $1,000 Useful Life 5 years 2 years 3. An engineer has three possible options for replacing the windows in a factory. Use EITHER PRESENT WORTH ANALYSIS OR REPEATED CASH FLOW ANALYSIS. The interest rate is 8% annually. Alternative Pipeline $32M SIM SIM Cost of Windows Annual Energy Savings Salvage Installation Cost Useful Life Dr. Crystal Walker's Jag Window Glass Products $400K $350K $20K $22K Windows $500K $21.1K $2.2K $2.1K $3K $12K $10K $17K 12 years 13 years 14 years