YR 5 PE 3 Economic Analysis alternative 1 Stake Body Truck Purchase 35325 11000 11000 YR 0 35000 per truck 325 per canvas cover 1 truck 35325 Recurring end of each year ID: 734043
Download Presentation The PPT/PDF document "YR 0 YR 1 YR 2 YR 3 YR 4" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Slide1
YR 0
YR 1
YR 2
YR 3
YR 4
YR 5
PE
3
Economic Analysis alternative 1 – Stake Body Truck Purchase
$35,325
$11,000
$11,000
YR 0 = ($35,000 per truck + $325 per canvas cover) * 1 truck = $35,325
Recurring end of each year =
Annual Operations & Maintenance (O & M or OMA) Cost =
$0.275 per mile * 50 miles per round trip * 800 round trips per year=
$
11,000
YR 6 =
($10,000)
per truck * 1 truck = ($10,000)
$11,000
$11,000
$11,000
YR 6
$11,000
($10,000)Slide2
Alternative 1Slide3
YR 0
YR 1
YR 2
YR 3
YR 4
YR 5
PE 7
Economic Analysis alternative 2 – CARGO VAN Purchase
$58,800
$9,000
$9,000
YR 0 = $58,800 per van * 1 van = $58,800
Recurring end of each year =
Annual Operations & Maintenance (O & M or OMA) Cost =
$0.225 per mile * 50 miles per round trip * 800 round trips per year=
$9,000
YR 6 =
($2,000)
per van *
1
van = ($2,000)
$9,000
$9,000
$9,000
YR 6
$9,000
($2,000)Slide4
Alternative 2Slide5
5. The O & M cost in Alternative 1 is an example of what kind of cost? (circle one)
Non recurring, Sunk cost, Terminal value, Salvage Value, or Recurring Cost
6. In Alternative 1 The truck can be sold for $10,000. This can also be referred to as the: (circle one) Non recurring, Sunk cost, Salvage value, or Recurring Cost
7. Alternative 2 requires a van costing $58,800, this is an example of what kind of cost? (circle one) Non recurring, sunk
cost, Terminal value, or Recurring Cost 8. What is the Uniform Annual cost without terminal value for Alternative 2?
9. What is the total discounted annual cost for Alternative 1?10. What alternative would you recommend based on Uniform Annual Cost (with terminal value)? Why
?11.
What is the Uniform Annual cost with terminal value for Alternative 2?
d
. $22,505
b. $83,219
Alternative 1, because it has a lower Uniform Annual Cost (with terminal value);
a. $22,246