Restoring balance to the nitrogen cycle is one of the challenges facing engineers. Improving the effectiveness and economical use offertilizer has been identified as an important step in the right direction. Engineers have designed an improved way to transportfertilizer and then to apply it directly at the point where crops are grown. Further development, assessment, and optimization of thenecessary equipment is estimated to require $220,000 in year 1, increasing by a gradient of $80,000 in each of years 2, 3, and 4. Then,it will begin to decrease by $95,000 in years 5, 6, 7, and 8. Interest is 14% per year.Part cWhat gradient series, beginning with the $220,000 in year 1 is equivalent to these cash flows?Click here to access the TVM Factor Table calculator.$tA

Present worth (PW) is a financial concept that reflects the current worth of a future sum of money…

Answered: Restoring balance to the nitrogen cycle…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 2TP: Austins cell phone manufacturer wants to upgrade their product mix to encompass an exciting new...

See similar textbooks

Similar questions

Two remediation options are being considered for a contaminated land area formerly used for industrial operations. Option 1 involves removing all of the contaminated soil over a two-year period at a cost of 2.2 million per year. Option 2 is to leave the soil in place but treat it with a bioremediation agent at a cost of 960,000/year over a three- year period. Subsequently, the soil would be sampled each for the next five years to ensure the effectiveness of the treatment system. The cost of the sampling program would be 250,000 the first year and 100,000/year for the remaining years. a) Draw a cash flow diagram for each of the two options.
Restoring balance to the nitrogen cycle is one of the challenges facing engineers. Improving the effectiveness and economical use of fertilizer has been identified as an important step in the right direction. Engineers have designed an improved way to transport fertilizer and then to apply it directly at the point where crops are grown. Further development, assessment, and optimization of the necessary equipment is estimated to require $235,000 in year 1, increasing by a gradient of $65,000 in each of years 2, 3, and 4. Then, it will begin to decrease by $75,000 in years 5, 6, 7, and 8. Interest is 14% per year.
Two remediation options are being considered for a contaminated land area formerly used for industrial operations. Option 1 involves removing all of the contaminated soil over a two-year period at a cost of 2.2 million per year. Option 2 is to leave the soil in place but treat it with a bioremediation agent at a cost of 960,000/year over a three-year period. Subsequently, the soil would be sampled each for the next five years to ensure the effectiveness of the treatment system. The cost of the sampling program would be 250,000 the first year and 100,000/year for the remaining years.i. Draw a cash flow diagram for each of the two options.ii. Calculate the net present value of each option based on discount rate of 6 percent/year.iii. Which option has the lowest overall cost? iv. What is the difference in the total cost between the two options based on NPV? Give your answer both in dollars and as a percentage difference.
Two remediation options are being considered for a contaminated land area formerly used for industrial operations. Option 1 involves removing all of the contaminated soil over a two-year period at a cost of 2.2$ million per year. Option 2 is to leave the soil in place but treat it with a bioremediation agent at a cost of 950,000$/year over a three-year period. Subsequently, the soil would be sampled each year for the next five years to ensure the effectiveness of the treatment system. The cost of the sampling program would be 240,000$ the first year and 120,000 $/year for the remaining four years.a)Calculate the net present value of each option based on a discount rate of 5% .b)Which option has the lowest overall cost? What is the difference in total cost between the two options based on NPV( percentage)?
Two remediation options are being considered for a contaminated land area formerly used for industrial operations. Option 1 involves removing all of the contaminated soil over a two-year period at a cost of 2.2 million per year. Option 2 is to leave the soil in place but treat it with a bioremediation agent at a cost of 960,000/year over a three-year period. Subsequently, the soil would be sampled each for the next five years to ensure the effectiveness of the treatment system. The cost of the sampling program would be 250,000 the first year and 100,000/year for the remaining years.Draw a cash flow diagram for each of the two options.a.Calculate the net present value of each option based on discount rate of 6 percent/year.b.Which option has the lowest overall cost? c.What is the difference in the total cost between the two options based on NPV? d.Give your answer both in dollars and as a percentage difference
1. Two remediation options are being considered for a contaminated land area formerly used for industrial operations. Option 1 involves removing all of the contaminated soil over a two-year period at a cost of 2.2 million per year. Option 2 is to leave the soil in place but treat it with a bioremediation agent at a cost of 960,000/year over a three- year period. Subsequently, the soil would be sampled each for the next five years to ensure the effectiveness of the treatment system. The cost of the sampling program would be 250,000 the first year and 100,000/year for the remaining years. a) Which option has the lowest overall cost at discount rate of 6 percent/year? What is the difference in the total cost between the two options based on NPV? Give your answer both in dollars and as a percentage difference.
A consulting engineer is considering two methods for lining landfill for municipal solid waste management in Bannock County, Idaho. A geosynthetic bentonite clay liner (GCL) will cost $2.0 million to install, and if it is renovated after 4 years at a cost of $400,000, its life can be extended another 2 years. Alternatively, a high-density polyethylene (HDPE) geomembrane can be installed that will have a useful life of 12 years. At an interest rate of 6% per year, how much money can be spent on the HDPE liner for the two methods to break even?
A grocery distribution center is considering whether to invest in RFID or bar code technology to track its inventory within the warehouse and truck loading operations. The useful life of the RFID and bar code devices is projected to be 5 years with minimal or zero salvage value. The bar code investment cost is $105,000 and can be expected to save at least $33,000 in product theft and lost items annually. The RFID system is estimated to cost $230,000 and will save $30,000 the first year, with an increase of $15,000 annually after the first year. For a 6% MARR, should the manager invest in the RFID system or the bar code system? Analyze incrementally using rate of return.
Pollution control equipment must be purchased to remove the suspended organic material from liquid being discharged from a vegetable packing plant. Two alternative pieces of equipment are available that would accomplish the task. A Filterco unit costs $7000 and has a 5-year useful life. A Duro unit, on the other hand, costs $10,000 but will have a 10-year useful life. With inflation, equipment costs are rising at 5% per year, compounded annually, so when the Filterco unit needed to be replaced, the cost would be much more than $7000. Based on a 10year analysis period, and a 20% minimum attractive rate of return, which pollution control equipment should be purchased?
New instrumentation is needed to monitor the level of environmental emissions at a large manufacturing plant. Two available systems give identical performance. One system cost $100,000 and will last for 10 years; the other costs $60,000 and will last for 6 years. The scrap value is negligible in both cases. Both systems also have an annual maintenance cost of $1,000/year. Is one of the systems preferable to the other based on cost? Assume the company’s interest is 10 percent.
A pork processing facility is considering the installation of either a storage facility or a holding pond. A biosystems engineer has been hired to evaluate the economic trade-offs for the two alternatives. The engineer estimates the cost of the storage facility to be $213,000, with annual costs for maintenance to be $3,200 per year. She estimates the cost of the pond to be $90,000, plus $45,000 for pumps and piping, and annual operating and maintenance costs for the holding pond are estimated to be $8,500. The engineer estimates the life of the storage facility and the pond to be around 20 years but is concerned about the accuracy of this estimate. She decides to do a sensitivity analysis. Solve, a. Develop the equation that she would use to determine how sensitive the economic decision is to changes in life. Use a MARR of 15%. b. Determine which alternative is preferred for lives ranging from 15 to 25 years.
Airodyne Wind, Inc., has wind tunnels that can operate vertically or horizontally for evaluating the effects of air flow on a component's PCB response and reliability. The company expects to build a new tunnel that will be outfitted with multiple sensor ports. For the estimates below, calculate the equivalent annual cost of the project. First Cost Replacement Cost, Year 2 AOC per Year Salvage Value Life, Years Interest Rate The equivalent annual cost of the project is $ $-570,000 $-300,000 $-870,000 $270,000 7 13%

SEE MORE QUESTIONS

Recommended textbooks for you

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Managerial Accounting: The Cornerstone of Busines…

Accounting

ISBN:

9781337115773

Author:

Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:

Cengage Learning

Cornerstones of Cost Management (Cornerstones Ser…

Accounting

ISBN:

9781305970663

Author:

Don R. Hansen, Maryanne M. Mowen

Publisher:

Cengage Learning

Principles of Accounting Volume 2

Accounting

ISBN:

9781947172609

Author:

OpenStax

Publisher:

OpenStax College

Managerial Accounting: The Cornerstone of Busines…

Accounting

ISBN:

9781337115773

Author:

Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:

Cengage Learning

Cornerstones of Cost Management (Cornerstones Ser…

Accounting

ISBN:

9781305970663

Author:

Don R. Hansen, Maryanne M. Mowen

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS