The following 4 investments are compared using the PW method.
Following is given the excel output along with the formulas used.
In these, it can be seen that the highest present worth is obtained from investment D, therefore, it is the best alternative.
You have been presented with 4 investment opportunities. You will receive an income on each investment...
You have been presented with 4 investment opportunities. You will receive an income on each investment for the next 8 years. MARR is 12% for your personal investments. Using an incremental analysis, which alternative should be chosen? The table below includes initial investment, net annual income, and IRR for each alternative. I would recomment to use incremental PW, however you can use your preferred method. A Capital investment $12,000 B $14,400 Alternative C $16,250 D $20,000 Net annual income $2,500...
You have been presented with 4 investment opportunities. You will receive an income on each investment for the next 8 years. MARR is 12% for your personal investments. Using an incremental analysis, which alternative should be chosen? The table below includes initial investment, net annual income, and IRR ch alternative. I would recomment to use incremental PW. however you can use your preferred method. A Capital investment $12,000 B $14,400 Alternative C D $16,250 $20,000 Net annual income $2,500 $3,050...
in the incremental analysis question, how did we calculate the IRR of these two alternatives (C-A)? can you show it to me step by step? Solution The next largest investment is in Alternative C, so examine the incremental investment of C over A. In the table below the IRR of C-A is shown. Alternative C- A Capital $12,000 $14,400 $2,400 investment $2,500 $3,050 $550 Net annual ncome 13.48% 15.86% IRR 12.99% 15.86% > MARR, so Alternative C "wins." Solution The...
The following mutually exclusive investment alternatives have been presented to you. The life of all alternatives is 10 years. A В C Capital investment Annual expenses $60,000 $90,000 $40,000 $30,000 $70,000 35,000 45,000 15,000 30,000 40,000 25,000 16,000 Annual revenues 50,000 52.000 38,000 28,000 Market value at EOY 10 15,000 10,000 10,000 39.0% 10,000 IRR ??? 7.4% 30.8% 9.2% After the base alternative has been identified, the first comparison to be made in an incremental analysis should be which of...
engineering economy QUESTION 2 The following mutually exclusive investment alternatives have been presented to you A B C E Capital investment $60,000 $90,000 $40,000 $30,000 $70,000 Annual expenses $30,000 $40,000 $25,000 $15,000 $35,000 Annual revenues $50,000 $52,000 $38,000 $28,000 $45,000 MV at EOY 10 $15,000 $15,000 $10,000 $10,000 $15,000 IRR 31.5 % 7.4 % 30.8 % 42.5 % 9.2 % The life span of all alternatives is 10 years.. Using a MARR of 15 % per year, what is the...
1.- You have the following three investment opportunities: 2 Capital Investment: Useful Life: Annual sales Variable costs (as % of sales) Fixed costs Salvage Value: $ 175,000.00 $ 120,000.00 $ 180,000.00 $ 120,000.00 $ 100,000.00 $ 230,000.00 65% 55% 70% $ 10,400.00 $ 13,000.00 $ 19,500.00 $ 30,000.00 $ 12,000.00 $ 100,000.00 MARR (annual): 6% a) Which investment alternative is the best? (use Cotermination and Imputed Value) which one
how do you find the incremental IRR? You are the President of AMT Enterprises. You have the opportunity to expand your product line to include a new semi-conductor wafer fabrication line. In order to produce the new wafer, you must invest in a new production process. In addition to doing nothing (DN), two mutually exclusive processes are currently available to produce the wafer. Should you produce this new wafer? In other words, which, if either, of the alternative processes should...
Consider four alternatives, each of which has an 8-year useful life: A B C D Initial cost $100 $80 $60 $50 Annual benefit $12.20 $12.00 $9.70 $12.20 Salvage Value $75.00 $50.00 $50.00 $0 a) Construct a plot with interest rate on the x axis and PW on the y axis. Plot the PW vs interest rate for all 4 alternatives. Label graphs and make sure the fonts are readable. If your computer chooses very light colors,...
6-15. You are the president of AMT Enterprises. You have the opportunity to expand your product line to include a new semi- conductor wafer fabrication line. In order to produce the new wafer, you must invest in a new production process. In addition to doing nothing, two mutually exclusive processes are currently available to produce the wafer. Should you produce this new wafer? In other words, which, if either, of the alternative processes should be chosen? Note: IRR for Alternative...
You are faced with a decision on an investment proposal. Specially, the estimated additional income from the investment is $180,000 per year; the initial investment costs are $640,000; and the estimated annual costs are $44,000, which begin decreasing by $4,000 per year starting at the end of third year. Assume an 8-year analysis period, no salvage value, and MARR = 15% (4.3, 4.6)a. What is PW of this proposal?b. What is IRR of this proposal?