Economics for Engineering

1- The initial cost of an alternative is $3,000,000. Revenues are $500,000 at the end of the first year decrease by 2% per year for the next 14 years. the useful life is 15 years. the MARR is 18 %. using future worth, is this good alternative?

2- Consider an alternative with following cash flows. Using IRR, is this a good alternative?

Initial cost $3,000,000 Annual Expeses $80,000 Annual Revenues $750,000

Salvage Value $100,000   Useful life 6 years MARR 10 %

3- Consider an alternative with the following cash flows. Using ERR, is this a good alternative?

Capital Investment $45,000 Annual Expenses $2000

Market Value $45000 Useful life 10 years

Revenues $5000 at the end of the first year increasing by $2000 per year for the next 9 years.

MARR 10%