7/27/2019 Harun Al Rasyid_ekotek5
1/18
EKOTEK
Harun Al Rasyid
1206262235
no
5.1 Differences between mutually projects and independent projects:
Mutually Exclusive Alternatives accomplish same things.Therefore, there is only one alternative to be selected
resulting in alternatives competing against each other.
Independent Projects accomplish different things.
Therefore, none of them, one of them, some of them,
or all of them can be selected as there is only "do nothi
alternative to compete against.
5.3 a. Possible alternatives from four independent projects ide
2m
= 24
There are 16 possible alternatives.
b. List of all possibilities
DN, W, X, Y, Z, WX, WY, WZ, XY, XZ, YZ, WXY, WXZ, WYZ,
5.5 Equal Service is a requirement which met when alternatives have same capaicities
5.7 Which one should be selected on a basis of a PW analysis at i = 10% / year?
i 10%
In-house Contract
First Cost (30.00)$ -$
Annual Cost (5.00)$ (2.00)$
Annual Income 14.00$ 3.10$
Salvage Value 2.00$ -$
Life Year 5.00$ 5.00$
Year
0 (30.00)$ -$
1 9.00$ 1.10$
2 9.00$ 1.10$
3 9.00$ 1.10$
4 9.00$ 1.10$
5 11.00$ 1.10$
Present Worth 5.36$ 4.17$
The In-house production should be selected as its revenue is higher
7/27/2019 Harun Al Rasyid_ekotek5
2/18
5.9 i 12%
Material X PV
First Cost (15,000.00)$ (15,000.00)$
Maintenance (9,000.00)$ (32,442.99)$
Salvage 2,000.00$ 1,134.85$Life Year 5
Present Worth (46,308.13)$
The material X should be selected due to its higher Present Worth
Difference between material X and material Y
Value to be more economic alternative is
5.11 i 6%
Plan A PV
First Cost (2,252,000.00)$ (2,252,000.00)$
Annual Cost (126,000.00)$ (1,985,994.44)$
Salvage in 5 years -$ -$
Life Year 50
Present Worth (4,237,994.44)$
The Plan B should be selected due to its higher Present Worth
5.13 i 10%
250 mm Pipe PVFirst Cost (155,000.00)$ (155,000.00)$
Annual Cost (3,000.00)$ (28,280.74)$
Life Year 30
Present Worth (183,280.74)$
The 250 mm Pipe should be selected due to its higher Present Worth
5.15 i 0.75% / month
GM's Volt PV
First Cost (35,000.00)$ (35,000.00)$Monthly Cost -$ -$
Salvage Value 15,000.00$ 9,748.97$
Life Year 5
Present Worth (25,251.03)$
The Nissan's Leaf should be selected due to its higher Present Worth
5.17 i 10%
7/27/2019 Harun Al Rasyid_ekotek5
3/18
Year First Cost Present Value Annual Cost
0 (40,000.00)$ (40,000.00)$ -$
1 -$ -$ (9,000.00)$
2 (40,000.00)$ (33,057.85)$ (9,000.00)$
3 -$ -$ (9,000.00)$4 (40,000.00)$ (27,320.54)$ (9,000.00)$
5 -$ -$ (9,000.00)$
6 (40,000.00)$ (22,578.96)$ (9,000.00)$
7 -$ -$ (9,000.00)$
8 -$ -$ (9,000.00)$
Present Worth (170,971.68)$
Year First Cost Present Value Annual Cost
0 (80,000.00)$ (80,000.00)$ -$
1 -$ -$ (6,000.00)$
2 -$ -$ (6,000.00)$
3 -$ -$ (6,000.00)$
4 (80,000.00)$ (54,641.08)$ (6,000.00)$
5 -$ -$ (6,000.00)$
6 -$ -$ (6,000.00)$
7 -$ -$ (6,000.00)$
8 -$ -$ (6,000.00)$
Present Worth (166,650.63)$
Year First Cost Present Value Annual Cost
0 (130,000.00)$ (130,000.00)$ -$
1 -$ -$ (4,000.00)$
2 -$ -$ (4,000.00)$
3 -$ -$ (4,000.00)$
4 -$ -$ (4,000.00)$
5 -$ -$ (4,000.00)$
6 -$ -$ (4,000.00)$
7 -$ -$ (4,000.00)$8 -$ -$ (4,000.00)$
Salvage 5,598.09$
Present Worth (145,741.62)$
The Method C should be selected due to its higher Present Worth
5.19 i 10%
Method A
Method B
Method C
7/27/2019 Harun Al Rasyid_ekotek5
4/18
Year First Cost Present Value Annual Cost
0 (250,000.00)$ (250,000.00)$ -$
1 -$ -$ (60,000.00)$
2 -$ -$ (60,000.00)$
3 (250,000.00)$ (187,828.70)$ (60,000.00)$4 -$ -$ (60,000.00)$
5 -$ -$ (60,000.00)$
6 -$ -$ (60,000.00)$
Present Worth (607,039.13)$
Year First Cost Present Value Annual Cost
0 (430,000.00)$ (430,000.00)$ -$
1 -$ -$ (40,000.00)$
2 -$ -$ (40,000.00)$
3 -$ -$ (40,000.00)$
4 -$ -$ (40,000.00)$
5 -$ -$ (40,000.00)$
6 -$ -$ (40,000.00)$
Present Worth (550,585.40)$
The Machine Y should be selected due to its higher Present Worth
5.21 i 10%
Year First Cost Present Value Annual Cost
0 (26,000.00)$ (26,000.00)$ -$
1 -$ -$ (5,000.00)$
2 -$ -$ (5,000.00)$
3 (26,000.00)$ (19,534.18)$ (5,000.00)$
4 -$ -$ (5,000.00)$
5 -$ -$ (5,000.00)$
6 -$ -$ (5,000.00)$
Present Worth (67,310.49)$
Year First Cost Present Value Annual Cost
0 (83,000.00)$ (83,000.00)$ -$
1 -$ -$ (1,400.00)$
2 -$ -$ (1,400.00)$
3 -$ -$ (3,900.00)$
Plan 1
Plan 2
Machine X
Machine Y
7/27/2019 Harun Al Rasyid_ekotek5
5/18
4 -$ -$ (1,400.00)$
5 -$ -$ (1,400.00)$
6 -$ -$ (3,900.00)$
Present Worth (92,386.84)$
The Plan 1 should be selected due to its higher Present Worth
5.23 i 8%
Year First Cost Present Value Annual Cost
0 (130,000.00)$ (130,000.00)$ -$
1 -$ -$ (290.00)$
2 -$ -$ (290.00)$
3 -$ -$ (290.00)$
4 -$ -$ (290.00)$
5 -$ -$ (290.00)$
6 -$ -$ (290.00)$
7 -$ -$ (290.00)$
8 -$ -$ (290.00)$
9 -$ -$ (290.00)$
10 -$ -$ (290.00)$
11 -$ -$ (290.00)$
12 -$ -$ (290.00)$
13 -$ -$ (290.00)$
14 -$ -$ (290.00)$
15 -$ -$ (290.00)$16 -$ -$ (290.00)$
17 -$ -$ (290.00)$
18 -$ -$ (290.00)$
19 -$ -$ (290.00)$
20 -$ -$ (290.00)$
21 -$ -$ (290.00)$
22 -$ -$ (290.00)$
23 -$ -$ (290.00)$
24 -$ -$ (290.00)$
25 -$ -$ (290.00)$
26 -$ -$ (290.00)$27 -$ -$ (290.00)$
28 -$ -$ (290.00)$
29 -$ -$ (290.00)$
30 -$ -$ (290.00)$
31 -$ -$ (290.00)$
32 -$ -$ (290.00)$
33 -$ -$ (290.00)$
34 -$ -$ (290.00)$
Fan X
7/27/2019 Harun Al Rasyid_ekotek5
6/18
35 -$ -$ (290.00)$
36 -$ -$ (290.00)$
37 -$ -$ (290.00)$
38 -$ -$ (290.00)$
39 -$ -$ (290.00)$
40 -$ -$ (290.00)$
41 -$ -$ (290.00)$42 -$ -$ (290.00)$
43 -$ -$ (290.00)$
44 -$ -$ (290.00)$
45 -$ -$ (290.00)$
46 -$ -$ (290.00)$
47 -$ -$ (290.00)$
48 -$ -$ (290.00)$
49 -$ -$ (290.00)$
50 -$ -$ (290.00)$
Present Worth (133,547.71)$
Year First Cost Present Value Annual Cost
0 -$ -$ -$
1 -$ -$ (290.00)$
2 -$ -$ (310.00)$
3 -$ -$ (330.00)$
4 -$ -$ (350.00)$
5 -$ -$ (370.00)$
6 -$ -$ (390.00)$7 -$ -$ (410.00)$
8 -$ -$ (430.00)$
9 -$ -$ (450.00)$
10 -$ -$ (470.00)$
11 -$ -$ (490.00)$
12 -$ -$ (510.00)$
13 -$ -$ (530.00)$
14 -$ -$ (550.00)$
15 -$ -$ (570.00)$
16 -$ -$ (590.00)$
17 -$ -$ (610.00)$18 -$ -$ (630.00)$
19 -$ -$ (650.00)$
20 -$ -$ (670.00)$
21 -$ -$ (690.00)$
22 -$ -$ (710.00)$
23 -$ -$ (730.00)$
24 -$ -$ (750.00)$
25 -$ -$ (770.00)$
Fan Y
7/27/2019 Harun Al Rasyid_ekotek5
7/18
26 -$ -$ (790.00)$
27 -$ -$ (810.00)$
28 -$ -$ (830.00)$
29 -$ -$ (850.00)$
30 -$ -$ (870.00)$
31 -$ -$ (890.00)$
32 -$ -$ (910.00)$33 -$ -$ (930.00)$
34 -$ -$ (950.00)$
35 -$ -$ (970.00)$
36 -$ -$ (990.00)$
37 -$ -$ (1,010.00)$
38 -$ -$ (1,030.00)$
39 -$ -$ (1,050.00)$
40 -$ -$ (1,070.00)$
41 -$ -$ (1,090.00)$
42 -$ -$ (1,110.00)$
43 -$ -$ (1,130.00)$
44 -$ -$ (1,150.00)$
45 -$ -$ (1,170.00)$
46 -$ -$ (1,190.00)$
47 -$ -$ (1,210.00)$
48 -$ -$ (1,230.00)$
49 -$ -$ (1,250.00)$
50 -$ -$ (1,270.00)$
Present Worth (6,339.57)$
Difference between Fan X and Fan Y 127,208.14$
Value to be equivalent economic alternative 127,208.14$
5.25 i 14%
I J K
Life Year (n) 3 4 12
PW over n years 16.07$ 31.12$ (257.46)$
PW over 6 years 26.94$ 15.78$ (653.29)$
PW over 12 years 39.21$ 60.45$ (257.46)$
a. If the alternatives are exclusive the largest Present Worth over 12 years (select Lb. If the projects are independent choose Present Worth 0 (select J)
5.27 i 12%
Year First Cost Future Value Annual Cost
Process T
7/27/2019 Harun Al Rasyid_ekotek5
8/18
0 (750,000.00)$ (1,180,139.52)$ -$
1 -$ -$ (60,000.00)$
2 (750,000.00)$ (940,800.00)$ (60,000.00)$
3 -$ -$ (60,000.00)$
4 -$ -$ (60,000.00)$
Future Worth (2,327,699.20)$
Year First Cost Future Value Annual Cost
0 (1,350,000.00)$ (2,124,251.14)$ -$
1 -$ -$ (25,000.00)$
2 -$ -$ (115,000.00)$
3 -$ -$ (25,000.00)$
4 -$ -$ (115,000.00)$
Future Worth (2,326,630.34)$
Process that be selected Process T
5.29 i 12%
Year First Cost Future Value Annual Cost
0 (1,600,000.00)$ (3,961,541.08)$ -$
1 -$ -$ (70,000.00)$
2 -$ -$ (70,000.00)$
3 -$ -$ (70,000.00)$4 (1,600,000.00)$ (2,517,630.98)$ (70,000.00)$
5 -$ -$ (70,000.00)$
6 -$ -$ (70,000.00)$
7 -$ -$ (70,000.00)$
8 -$ -$ (70,000.00)$
Future Worth (6,940,150.58)$
Year First Cost Future Value Annual Cost
0 (2,100,000.00)$ (5,199,522.67)$ -$1 -$ -$ (50,000.00)$
2 -$ -$ (53,000.00)$
3 -$ -$ (56,000.00)$
4 -$ -$ (59,000.00)$
5 -$ -$ (62,000.00)$
6 -$ -$ (65,000.00)$
7 -$ -$ (68,000.00)$
8 -$ -$ (71,000.00)$
Process W
System K
System L
7/27/2019 Harun Al Rasyid_ekotek5
9/18
Future Worth (5,921,999.66)$
Process that be selected System K
5.31 i 8%
Year Cash Flow
0 (100,000.00)$
1 (100,000.00)$
2 (100,000.00)$
3 (100,000.00)$
4 (100,000.00)$
5 (100,000.00)$
(100,000.00)$
Capitalised Cost
Annual Cost (100,000.00)$
Capitalised Cost (1,350,000.00)$
5.33 i 12%
PV (300,000.00)$
A (35,000.00)$
FV (75,000.00)$
Capitalised Cost
Annual Cost (11,805.73)$
Capitalised Cost 1 (300,000.00)$Capitalised Cost 2 (291,666.67)$
Capitalised Cost 3 (98,381.08)$
Total Capitalises Cost (690,047.75)$
5.35 i 10%
Alternative M Alternative N
First Cost (150,000.00)$ (800,000.00)$
Annual Cost (50,000.00)$ (12,000.00)$
Salvage Value 8,000.00$ 1,000,000.00$
n 5
Comparing the alternatives on a basis of capitalised cost
Present Value 1 (150,000.00)$ (800,000.00)$
Present Value 2 (189,539.34)$ (120,000.00)$
Present Value 3 4,967.37$ -$
Present Value total (334,571.97)$ (920,000.00)$
7/27/2019 Harun Al Rasyid_ekotek5
10/18
Alternative M is selected
5.37 i 8%
n 12.00$
Annual (40,000.00)$
Capitalised Cost
Annual Worth (8,507.80)$Capitalised Cost (106,347.51)$
7/27/2019 Harun Al Rasyid_ekotek5
11/18
7/27/2019 Harun Al Rasyid_ekotek5
12/18
Material Y PV
(35,000.00)$ (35,000.00)$
(7,000.00)$ (25,233.43)$
20,000.00$ 11,348.54$5
(48,884.90)$
(2,576.76)$
(30,000.00)$
Plan B PV
(3,462,120.00)$ (3,462,120.00)$
-$ -$
500,000.00$ 373,629.09$
50
(3,088,490.91)$
300 mm Pipe PV(210,000.00)$ (210,000.00)$
-$ -$
30
(210,000.00)$
Nissan's Leaf PV
(1,500.00)$ (1,500.00)$(349.00)$ (16,812.51)$
-$ -$
5
(18,312.51)$
7/27/2019 Harun Al Rasyid_ekotek5
13/18
Present Value
-$
(8,181.82)$
(7,438.02)$
(6,761.83)$(6,147.12)$
(5,588.29)$
(5,080.27)$
(4,618.42)$
(4,198.57)$
Present Value
-$
(5,454.55)$
(4,958.68)$
(4,507.89)$
(4,098.08)$
(3,725.53)$
(3,386.84)$
(3,078.95)$
(2,799.04)$
Present Value
-$
(3,636.36)$
(3,305.79)$
(3,005.26)$
(2,732.05)$
(2,483.69)$
(2,257.90)$
(2,052.63)$(1,866.03)$
7/27/2019 Harun Al Rasyid_ekotek5
14/18
Present Value Salvage Present Value
-$ -$ $0.00
(54,545.45)$ -$ $0.00
(49,586.78)$ -$ $0.00
(45,078.89)$ 70,000.00$ $52,592.04(40,980.81)$ -$ $0.00
(37,255.28)$ -$ $0.00
(33,868.44)$ 70,000.00$ $39,513.18
Present Value Salvage Present Value
-$ -$ -$
(36,363.64)$ -$ -$
(33,057.85)$ -$ -$
(30,052.59)$ -$ -$
(27,320.54)$ -$ -$
(24,836.85)$ -$ -$
(22,578.96)$ 95,000.00$ 53,625.02$
Present Value
-$
(4,545.45)$
(4,132.23)$
(3,756.57)$
(3,415.07)$
(3,104.61)$
(2,822.37)$
Present Value
-$
(1,272.73)$
(1,157.02)$
(2,930.13)$
7/27/2019 Harun Al Rasyid_ekotek5
15/18
(956.22)$
(869.29)$
(2,201.45)$
Present Value
-$
(268.52)$
(248.63)$
(230.21)$
(213.16)$
(197.37)$
(182.75)$
(169.21)$
(156.68)$
(145.07)$
(134.33)$
(124.38)$
(115.16)$
(106.63)$
(98.73)$
(91.42)$(84.65)$
(78.38)$
(72.57)$
(67.20)$
(62.22)$
(57.61)$
(53.34)$
(49.39)$
(45.73)$
(42.35)$
(39.21)$(36.30)$
(33.61)$
(31.12)$
(28.82)$
(26.68)$
(24.71)$
(22.88)$
(21.18)$
7/27/2019 Harun Al Rasyid_ekotek5
16/18
(19.61)$
(18.16)$
(16.82)$
(15.57)$
(14.42)$
(13.35)$
(12.36)$(11.44)$
(10.60)$
(9.81)$
(9.09)$
(8.41)$
(7.79)$
(7.21)$
(6.68)$
(6.18)$
Present Value
-$
(268.52)$
(265.78)$
(261.96)$
(257.26)$
(251.82)$
(245.77)$(239.23)$
(232.32)$
(225.11)$
(217.70)$
(210.15)$
(202.53)$
(194.88)$
(187.25)$
(179.69)$
(172.22)$
(164.86)$(157.66)$
(150.61)$
(143.75)$
(137.07)$
(130.60)$
(124.33)$
(118.27)$
(112.43)$
7/27/2019 Harun Al Rasyid_ekotek5
17/18
(106.81)$
(101.40)$
(96.21)$
(91.23)$
(86.46)$
(81.89)$
(77.53)$(73.37)$
(69.39)$
(65.61)$
(62.00)$
(58.57)$
(55.30)$
(52.20)$
(49.25)$
(46.46)$
(43.81)$
(41.29)$
(38.91)$
(36.65)$
(34.52)$
(32.50)$
(30.59)$
(28.78)$
(27.08)$
L
6
140.46$
140.46$
204.46$
) 204.46Alt I 39.21
Alt J 60.45
Alt L 204.46
Future Value
7/27/2019 Harun Al Rasyid_ekotek5
18/18
-$
(84,295.68)$
(75,264.00)$
(67,200.00)$
(60,000.00)$
Future Value
-$
(35,123.20)$
(144,256.00)$
(28,000.00)$
(115,000.00)$
Future Value
-$
(154,747.70)$
(138,167.59)$
(123,363.92)$(110,146.36)$
(98,344.96)$
(87,808.00)$
(78,400.00)$
(70,000.00)$
Future Value
-$(110,534.07)$
(104,612.60)$
(98,691.13)$
(92,837.64)$
(87,105.54)$
(81,536.00)$
(76,160.00)$
(71,000.00)$