Fiesta Foundry is considering a new furnace that will allow them to be more productive. Three alternative furnaces are under consideration. Perform an incremental analysis of these alternatives using the IRR method for each increment of cash flows. The MARR is 12% per year. Click the icon to view the description of the alternatives. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. Perform the incremental PW Analysis. Fill-in the table below (Hint: Order alternatives by increasing capital investment). (Round to the nearest dollar.) Incremental Investment Alternative to be selected Inc. PW Furnace C AC DN Furnace C C 4(B A(A Furnace C -IC iMore Info Furnace B Furnace C Furnace A Initial investment $480,000 $360,000 $220,000 $70,000 Annual revenues $90,000 $11,000 $50,000 15 years $70,000 $6,000 $45,000 Annual cost $14,000 $45,000 Salvage value Life of asset 15 years Annual revenue and cost figures are increases over the "do nothing" alternative (DN) 15 years Print Done Discrete Compounding; i= 12% Single Payment Uniform Series Compound Amount Compound Sinking Fund Capital Recovery Present Present Amount Factor Worth Factor Factor Worth Factor Factor Factor To Find F To Find P To Find F To Find P To Find A To Find A Given P Given F Given A Given A Given F Given P FIP AIP PIF FIA PIA AIF 0.8929 1.1200 1 0.8929 1.0000 1.0000 1.1200 0.4717 2 1.2544 0.7972 2.1200 1.6901 0.5917 1.4049 0.7118 3.3744 2.4018 0.2963 0.4163 1,5735 0.2092 4 0.6355 4.7793 3.0373 0.3292 6.3528 5 1.7623 0.5674 3.6048 0.1574 0.2774 4.1114 0.1232 6 1.9738 0.5066 8.1152 0.2432 7 2.2107 0.4523 10.0890 4.5638 0.0991 0.2191 2.4760 0.4039 12.2997 4.9676 0.0813 0.2013 5.3282 0.0677 9 2.7731 0.3606 14.7757 0.1877 5.6502 10 3.1058 0.3220 17.5487 0.1770 0.0570 3.4785 11 0.2875 20.6546 5.9377 0.0484 0.1684 3.8960 12 0.2567 24.1331 6.1944 0.0414 0.1614 13 4.3635 0.2292 28.0291 6.4235 0.0357 0.1557 14 4.8871 0.2046 32.3926 6.6282 0.0309 0.1509 15 5.4736 0.1827 37.2797 6.8109 0.0268 0.1468 6.1304 16 0.1631 42.7533 6.9740 0.0234 0.1434 0.1456 0.0205 17 6.8660 48.8837 7.1196 0.1405 18 7.6900 0.1300 55.7497 7.2497 0.0179 0.1379 19 8.6128 0.1161 63.4397 7.3658 0.0158 0.1358 20 9.6463 0.1037 72.0524 7.4694 0.0139 0.1339 0.0122 21 10.8038 0.0926 81.6987 7.5620 0.1322 92.5026 22 12.1003 0.0826 7.6446 0.0108 0.1308 23 13.5523 0.0738 104.6029 7.7184 0.0096 0.1296 118.1552 7.7843 0.0085 0.1285 24 15.1786 0.0659 25 17.0001 0.0588 133.3339 7.8431 0.0075 0.1275 29.9599 30 0.0334 241.3327 8.0552 0.0041 0.1241 35 52.7996 0.0189 431.6635 8.1755 0.0023 0.1223 40 93.0510 0.0107 767.0914 8.2438 0.0013 0.1213 8.2825 0.0007 45 163.9876 0.0061 1358.2300 0.1207 co

Fiesta Foundry is considering a new furnace that will allow them to be more productive. Three alternative furnaces are under consideration. Perform an incremental analysis of these alternatives using the IRR method for each increment of cash flows. The MARR is 12% per year. Click the icon to view the description of the alternatives. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 12% per year. Perform the incremental PW Analysis. Fill-in the table below (Hint: Order alternatives by increasing capital investment). (Round to the nearest dollar.) Incremental Investment Alternative to be selected Inc. PW Furnace C AC DN Furnace C C 4(B A(A Furnace C -IC iMore Info Furnace B Furnace C Furnace A Initial investment $480,000 $360,000 $220,000 $70,000 Annual revenues $90,000 $11,000 $50,000 15 years $70,000 $6,000 $45,000 Annual cost $14,000 $45,000 Salvage value Life of asset 15 years Annual revenue and cost figures are increases over the "do nothing" alternative (DN) 15 years Print Done Discrete Compounding; i= 12% Single Payment Uniform Series Compound Amount Compound Sinking Fund Capital Recovery Present Present Amount Factor Worth Factor Factor Worth Factor Factor Factor To Find F To Find P To Find F To Find P To Find A To Find A Given P Given F Given A Given A Given F Given P FIP AIP PIF FIA PIA AIF 0.8929 1.1200 1 0.8929 1.0000 1.0000 1.1200 0.4717 2 1.2544 0.7972 2.1200 1.6901 0.5917 1.4049 0.7118 3.3744 2.4018 0.2963 0.4163 1,5735 0.2092 4 0.6355 4.7793 3.0373 0.3292 6.3528 5 1.7623 0.5674 3.6048 0.1574 0.2774 4.1114 0.1232 6 1.9738 0.5066 8.1152 0.2432 7 2.2107 0.4523 10.0890 4.5638 0.0991 0.2191 2.4760 0.4039 12.2997 4.9676 0.0813 0.2013 5.3282 0.0677 9 2.7731 0.3606 14.7757 0.1877 5.6502 10 3.1058 0.3220 17.5487 0.1770 0.0570 3.4785 11 0.2875 20.6546 5.9377 0.0484 0.1684 3.8960 12 0.2567 24.1331 6.1944 0.0414 0.1614 13 4.3635 0.2292 28.0291 6.4235 0.0357 0.1557 14 4.8871 0.2046 32.3926 6.6282 0.0309 0.1509 15 5.4736 0.1827 37.2797 6.8109 0.0268 0.1468 6.1304 16 0.1631 42.7533 6.9740 0.0234 0.1434 0.1456 0.0205 17 6.8660 48.8837 7.1196 0.1405 18 7.6900 0.1300 55.7497 7.2497 0.0179 0.1379 19 8.6128 0.1161 63.4397 7.3658 0.0158 0.1358 20 9.6463 0.1037 72.0524 7.4694 0.0139 0.1339 0.0122 21 10.8038 0.0926 81.6987 7.5620 0.1322 92.5026 22 12.1003 0.0826 7.6446 0.0108 0.1308 23 13.5523 0.0738 104.6029 7.7184 0.0096 0.1296 118.1552 7.7843 0.0085 0.1285 24 15.1786 0.0659 25 17.0001 0.0588 133.3339 7.8431 0.0075 0.1275 29.9599 30 0.0334 241.3327 8.0552 0.0041 0.1241 35 52.7996 0.0189 431.6635 8.1755 0.0023 0.1223 40 93.0510 0.0107 767.0914 8.2438 0.0013 0.1213 8.2825 0.0007 45 163.9876 0.0061 1358.2300 0.1207 co

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 13E: Buena Vision Clinic is considering an investment that requires an outlay of 600,000 and promises a...

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