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CE 3361 NAME:____________________
PROJECT IIA DATE:_____________________
SHOW ALL WORK AND CALCULATIONS
DO NEAT AND PROFESSIONAL WORK
DUE: 13 MARCH 2017 at 10:00 pm

1. GIVEN THE FOLLOWING CASH TRANSACTIONS. IT IS YOUR

RESPONSIBILITY TO PERFORM AN ECONOMIC ANALYSIS ON YOUR
ASSIGNED ALTERNATIVE.

ALTERNATE A

INITIAL INVESTIMENT $ 150,000

OPERATIONS AND $ 1300/YR

MAINTENANCE

UPGRADES $ 2000/
EVERY 3 YEARS

INSURANCE $ 800/YR

REVENUE $ 12,500
INCREASE $4,500/YR

SALVAGE $ 10,000

USEFUL LIFE 9 YEARS

INTEREST ON COST 4 %/YR

INTEREST ON REVENUE 1.5%/YR

ANSWER THE FOLLOWING QUESTIONS AND FILL-IN ALL BLANK SPACES

 CE 3361
PROJECT IIA

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NAME:____________________

SHOW ALL WORK AND CALCULATIONS

(10) 1. WHAT IS THE ALTERNATE A PAYMENT PERIOD: ___________________

2. IF THE SEMIANNUAL INTEREST RATE ON THE INVESTMENT IS 3.3%

COMPOUNDED QUARTERLY, CALCULATE THE EFFECTIVE ANNUAL
INTEREST RATE?
(20)

3. DETERMINE THE PRESENT WORTH OF ALTERNATE A.

i = 4%/YR
COST n = 9 YEARS

ELEMENT n P/F P/A PRESENT SOURCE

WORTH

-$150,000 0 - -$
-$ 2,000 3 0.8890 -$ TABLE 9
-$ 2,000 6 - $ 1,581 TABLE 9 -
$ 2,000 9
-$ 1,300 9 -$
-$ 800 9 -$
PRESENT WORTH COST: - $

i = 1.5%/YR
REVENUE n = 9 YEARS

ELEMENT n P/F P/A P/G PRESENT SOURCE

WORTH

$ 12,500 9 - 8.3605 - $
$ 4,500 9 - $ 146,756 TABLE 6
$ 10,000 - $
PRESENT WORTH REVENUE: $
CE 3361
PROJECT IIA

NET PRESENT WORTH: $___________

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NAME:____________________

BE YEE NEAT
SHOW ALL WORK AND CALCULATIONS

4. DETERMINE THE ANNUAL WORTH OF ALTERNATE A.

i = ____ /YR
COST n = ____ YEARS

ELEMENT PRESENT n A/P ANNUAL SOURCE

WORTH WORTH
-$150,000 -$ -$
-$ 2,000 9 -$ TABLE 9
-$ 2,000 -$ -$ 213 -$
2,000
-$ 1,300 -$
-$ 800 -$ 800
ANNUAL WORTH COST: - $

i = ____ /YR
REVENUE n = ____ YEARS

ELEMENT PRESENT n A/P ANNUAL SOURCE

WORTH WORTH

$ 12,500 $ $ 12,500
$ 4,500 $ 9 $ TABLE 6
$ 10,000 $ $
ANNUALWORTH REVENUE: $

NET ANNUAL WORTH: $___________

CE 3361
PROJECT IIA

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NAME:____________________

BE YEE NEAT
SHOW ALL WORK AND CALCULATIONS

4. DETERMINE THE FUTURE WORTH OF ALTERNATE A.

i = ____ /YR
COST n = ____ YEARS

ELEMENT PRESENT n F/P FUTURE SOURCE

WORTH WORTH
-$150,000 -$150,000 -$
-$ 2,000 9 -$ TABLE 9
-$ 2,000 -$ -$
-$ 2,000 -$ 2,000 TABLE 9
-$ 1,300 -$
-$ 800 -$
FUTURE WORTH COST: - $

i = ____ /YR
REVENUE n = ____ YEARS

ELEMENT PRESENT n F/P FUTURE SOURCE

WORTH WORTH
$ 12,500 $ $
$ 4,500 9 $ TABLE 6
$ 10,000 $ $ 10,000
FUTURE WORTH REVENUE: $

NET FUTURE WORTH: $___________

5A. IS THE CAPITALIZED COST

SHORT TERM LONG TERM

HALF TERM MID TERM

5B. CALCULATE THE CAPITALIZED COST

CE 3361
PROJECT IIA

CCT = AWC/i CCT =

CCT = -$ - CCT =

0.04