Homework Answers
ANSWER:
| YEAR | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 |
| cash flow | -8,000 | 500 | 500 | 500 | 500 | 1500 | 1500 | 1500 | 6000 |
| irr | 7.41% |
Since the incremental irr is less then marr , therefore we will select machine a.
option d is the right answer.
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*Two mutually exclusive cost alternatives, Machine A and Machine B, are being evaluated Given the following...
5 Questions 4 through 7 are based on the following statement: 1 tually exclusive alternatives, A...
5 Questions 4 through 7 are based on the following statement: 1 tually exclusive alternatives, A and B, are to be evaluated by the rate of return (ROR) method. The initial Investment for alternative B is greater than that of alternative A. If the overall ROR of alternative A is less than the MARR and the overall rate of return of alternative B is greater than the MARR, then: A) Alternative B should be compared incrementally to alternative A. B)...
Question 7 (1 point) In evaluating independent projects, no incremental analysis is necessary between projects. Each...
Question 7 (1 point) In evaluating independent projects, no incremental analysis is necessary between projects. Each project is evaluated separately from others, and more than one project can be selected. Therefore, the only comparison is with the do-nothing alternative for each project. Question 7 options: True False 10. Given the following time events and incremental cash flow, if the MARR is 12% per year, which alternative should be selected on the basis of rate of return? Assume alternative B requires...
**The four revenue alternatives described below are being evaluated by the rate of return method. If...
**The four revenue alternatives described below are being evaluated by the rate of return method. If the alternatives are mutually exclusive, which one(s) should be selected when the MARR is 17% per year? Incremental Rate of Return (%) When compared with Alternative Alternative A Initial Investment ($) Overall Rate of Return i(%) -80,000 -110,000 -150,000 -230,000 Select only alternative D Select only alternative B Select only alternative C Select alternatives A, B, C, and D
Three mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are...
Three mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are given next. The MARR is 20% per year. At the conclusion of the useful life, the investment will be sold. B Investment cost Annual expenses Annual revenues Market value Useful life $28,000 $15,000 $23,000 $6,000 10 years 10 years 10 years 26.4% $55,000 $40,000 $22,000 $32,000 $10,000 $13,000 $28,000 $8,000 24.7% 22.4% IRR A decision-maker can select one of these alternatives or decide to...
Two mutually exclusive design alternatives are being considered for purchase. Doing nothing is also an option....
Two mutually exclusive design alternatives are being considered for purchase. Doing nothing is also an option. The estimated cash flows for each alternative are given below. The MARR is 10% per year. Using the PW method, which alternative, if either, should be recommended? Capital Investment Annual Revenues Annual Expenses MV at end of useful life Useful Life IRR Alternative 1 $15,000 $8,000 $2,900 $2,000 4 years 17.2% Alternative 2 $23,000 $12,000 S3,000 $800 12 years 38.4%
Consider the two mutually exclusive alternatives given in the table below. W NO Net Cash Flow Project A1 Project...
Consider the two mutually exclusive alternatives given in the table below. W NO Net Cash Flow Project A1 Project A2 - $12,000 - $14,000 5,000 6,200 5,000 6,200 5,000 6,200 (a) Determine the IRR on the incremental investment in the amount of $2,000. The IRR on incremental investment is %. (Round to one decimal place.)
The five alternatives below are being evaluated by the rate of return method. If the alternatives...
The five alternatives below are being evaluated by the rate of
return method.
If the alternatives below are mutually exclusive and the MARR is
15% per year, the alternative to select is:
a). either B,C,D, or E b). Only B c). Only D d).
Only E
(I put in Only B, but it says its wrong somehow.)
*, %, when Initial Overall Compared with Proposal -25,000 -35,000 -40,000 27.3 19.4 35.3 38.5 25.0 24.4 27.3 26.8 15.1 13.4 -75,000
Problems 6, 7 and 8 use the following table: five alternatives are being evaluated by the...
Problems 6, 7 and 8 use the following table: five alternatives are being evaluated by the incrementar rate of return method. Incremental Rate of Return, % Initial Overall ROR Alternative Investment, $ versus DN, % A B C D E - 25,000 9.6 27.3 9.4 35.3 25.0 -35,000 15.1 0 38.5 24.4 - 40,000 13.4 - 46.5 27.3 - 60,000 25.4 -75,000 20.2 6.8 6. If the projects are mutually exclusive and the minimum attractive rate of return is 14%...
Consider the two mutually exclusive investment projects given in the table below for which MARR=11%. On...
Consider the two mutually exclusive investment projects given
in the table below for which MARR=11%. On the basis of the IRR
criterion, which project would be selected under an infinite
planning horizon with project repeatability likely?
The rate of return on the incremental investment is ?%
Homework: HW #7 Save Score: 0 of 1 pt 10 of 10 (8 complete) HW Score: 78.33%, 7.83 of 10 pts Problem 7-56 (algorithmic) Question Help Consider the two mutually exclusive investment projects given...
Questions 10-15 are based on the following information about two mutually exclusive investment alternatives. The MARR...
Questions 10-15 are based on the following information about two mutually exclusive investment alternatives. The MARR is 12%. Initial Investment Annual Revenue Useful Life (Years) CMS FMS $20,000 $29,000 6,688 9,102 55 10. Which option should be selected as the base alternative? A. CMS B. FMS. C. Neither option is acceptable as a base alternative. D. Both options are acceptable base alternatives. E. I'm completely lost! Which option should be selected as the challenger alternative? A. CMS B. FMS. C....
5 Questions 4 through 7 are based on the following statement: 1 tually exclusive alternatives, A and B, are to be evaluated by the rate of return (ROR) method. The initial Investment for alternative B is greater than that of alternative A. If the overall ROR of alternative A is less than the MARR and the overall rate of return of alternative B is greater than the MARR, then: A) Alternative B should be compared incrementally to alternative A. B)...
**The four revenue alternatives described below are being evaluated by the rate of return method. If the alternatives are mutually exclusive, which one(s) should be selected when the MARR is 17% per year? Incremental Rate of Return (%) When compared with Alternative Alternative A Initial Investment ($) Overall Rate of Return i(%) -80,000 -110,000 -150,000 -230,000 Select only alternative D Select only alternative B Select only alternative C Select alternatives A, B, C, and D
Three mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are given next. The MARR is 20% per year. At the conclusion of the useful life, the investment will be sold. B Investment cost Annual expenses Annual revenues Market value Useful life $28,000 $15,000 $23,000 $6,000 10 years 10 years 10 years 26.4% $55,000 $40,000 $22,000 $32,000 $10,000 $13,000 $28,000 $8,000 24.7% 22.4% IRR A decision-maker can select one of these alternatives or decide to...
Two mutually exclusive design alternatives are being considered for purchase. Doing nothing is also an option. The estimated cash flows for each alternative are given below. The MARR is 10% per year. Using the PW method, which alternative, if either, should be recommended? Capital Investment Annual Revenues Annual Expenses MV at end of useful life Useful Life IRR Alternative 1 $15,000 $8,000 $2,900 $2,000 4 years 17.2% Alternative 2 $23,000 $12,000 S3,000 $800 12 years 38.4%
Consider the two mutually exclusive alternatives given in the table below. W NO Net Cash Flow Project A1 Project A2 - $12,000 - $14,000 5,000 6,200 5,000 6,200 5,000 6,200 (a) Determine the IRR on the incremental investment in the amount of $2,000. The IRR on incremental investment is %. (Round to one decimal place.)
The five alternatives below are being evaluated by the rate of
return method.
If the alternatives below are mutually exclusive and the MARR is
15% per year, the alternative to select is:
a). either B,C,D, or E b). Only B c). Only D d).
Only E
(I put in Only B, but it says its wrong somehow.)
*, %, when Initial Overall Compared with Proposal -25,000 -35,000 -40,000 27.3 19.4 35.3 38.5 25.0 24.4 27.3 26.8 15.1 13.4 -75,000
Problems 6, 7 and 8 use the following table: five alternatives are being evaluated by the incrementar rate of return method. Incremental Rate of Return, % Initial Overall ROR Alternative Investment, $ versus DN, % A B C D E - 25,000 9.6 27.3 9.4 35.3 25.0 -35,000 15.1 0 38.5 24.4 - 40,000 13.4 - 46.5 27.3 - 60,000 25.4 -75,000 20.2 6.8 6. If the projects are mutually exclusive and the minimum attractive rate of return is 14%...
Consider the two mutually exclusive investment projects given
in the table below for which MARR=11%. On the basis of the IRR
criterion, which project would be selected under an infinite
planning horizon with project repeatability likely?
The rate of return on the incremental investment is ?%
Homework: HW #7 Save Score: 0 of 1 pt 10 of 10 (8 complete) HW Score: 78.33%, 7.83 of 10 pts Problem 7-56 (algorithmic) Question Help Consider the two mutually exclusive investment projects given...
Questions 10-15 are based on the following information about two mutually exclusive investment alternatives. The MARR is 12%. Initial Investment Annual Revenue Useful Life (Years) CMS FMS $20,000 $29,000 6,688 9,102 55 10. Which option should be selected as the base alternative? A. CMS B. FMS. C. Neither option is acceptable as a base alternative. D. Both options are acceptable base alternatives. E. I'm completely lost! Which option should be selected as the challenger alternative? A. CMS B. FMS. C....
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