Homework Answers
| Computation of Net Present Value | |||||
| Plan B | Plan-C | ||||
| Year | PVF@12% | Amount | PV | Amount | PV |
| 0 | 1 | -$110,000.00 | -$110,000.00 | ||
| 1 | 0.8929 | -$30,000.00 | -$26,785.71 | ||
| 2 | 0.7972 | -$30,000.00 | -$23,915.82 | ||
| 3 | 0.7118 | -$30,000.00 | -$21,353.41 | ||
| 4 | 0.6355 | -$30,000.00 | -$19,065.54 | ||
| 5 | 0.5674 | -$30,000.00 | -$17,022.81 | ||
| Present Value | -$110,000.00 | -$108,143.29 | |||
Franklin should follow Plan -C
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points Franklin Company plans to order and purchase some special drilling equipment that will be constructed and ready for service five years hence. If Franklin pays for the equipment upon completion (Plan A), it will cost $200,000. However, two alternative payment plans are available. Plan B would require an immediate payment of $110,000. Plan C would require five annual payments of $30,000, the first of which would be made one year hence. Assume an interest rate of 12% for each...
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points Franklin Company plans to order and purchase some special drilling equipment that will be constructed and ready for service five years hence. If Franklin pays for the equipment upon completion (Plan A), it will cost $200,000. However, two alternative payment plans are available. Plan B would require an immediate payment of $110,000. Plan C would require five annual payments of $30,000, the first of which would be made one year hence. Assume an interest rate of 12% for each...
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Beaufort Sea Production Company (BSPC) operates a medium-sized oil
field on Alaska’s north coast. The field is still producing at its
maximum rate, 325,000 barrels of oil per day (BOPD). However, to
sustain this rate the company started a waterflood of the reservoir
two years ago. Now a capacity bottleneck in the water disposal
process is threatening to curtail production. In waterflooding,
salt water from the Beaufort Sea is treated to remove...
How can we assess whether a project is a success or a
failure?
This case presents two phases of a large business transformation project involving the implementation of an ERP system with the aim of creating an integrated company. The case illustrates some of the challenges associated with integration. It also presents the obstacles facing companies that undertake projects involving large information technology projects. Bombardier and Its Environment Joseph-Armand Bombardier was 15 years old when he built his first snowmobile...
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