1. The annual worth of a perpetual project is called its capitalized worth. True or False?...
1. The annual worth of a perpetual project is called its capitalized worth.
True or False?
2. Different-life alternatives can be compared by the present worth method based on equal service, if you calculate the annual worth of each alternative over its life cycle and then multiply the resulting A value by the P/A factor for their LCM.
True or False?
3. The equivalent annual worth of unequal-life alternatives can be determined by first calculating their present worth for one life cycle and then multiplying that value by the A/P factor for their LCM.
True or False
Homework Answers
1. The given statement is False that the annual worth of a perpetual project is called it's capitalized worth.
2. The given statement is True that different life alternatives can be compared by the present worth method based on equal service, if you calculate the annual worth of each alternative over it's life cycle and then multiply the resulting A value by the P/A factor for their LCM.
Add Answer to:
1. The annual worth of a perpetual project is called its
capitalized worth.
True or False?...
The annual worth of a permanent investment can be determined from its capitalized cost by a)...
The annual worth of a permanent investment can be determined from its capitalized cost by a) Raising to the power of i b) dividing by -i c) dividing by i d) multiplying by i
3. We discussed in class the fact that when it comes to calculating the Annual Worth...
3. We discussed in class the fact that when it comes to calculating the Annual Worth (AW) of alternatives have different lives. Why the AW calculations and analyses are done this way compared to those of the Present Worth (PW) and the Future worth (FW) analyses alternatives, we bse the actual life (n) for each alternative even if the and calculations? 4. A small company would like to set aside the amount of $90,000 now to purchase a new piece...
Question 2 (1 point) A tabulation of incremental cash flow between two different-life alternatives must be...
Question 2 (1 point) A tabulation of incremental cash flow between two different-life alternatives must be prepared over the LCM of their lives. True False Question 3 (1 point) In evaluating mutually exclusive alternatives on the basis of rate of return, it is necessary to conduct an "Incremental ROR"in order to obtain the same ranking as the PW and AW methods True False Question 7 (1 point) When an incremental rate of return analysis is conducted correctly, the alternative identified...
1.) Two alternatives are being considered to perform a given job. Both of these alternatives provide...
1.) Two alternatives are being considered to perform a given job. Both of these alternatives provide equal service. The cost data for each alternative are provided in the tables below: Alternative 1 900,000 100,000 Alternative 2 300,000 30,000 Initial Cost Salvage Value Life, years Annual cost of operation and maintenance Required return 15,000 20,000 20 T20 Use a conventional cost comparison and determine: (a) An equivalent annual cost comparison assuming infinite service need. Which one do you choose? Why? (b)...
uestion 3 Using PW Analysis, for mutually exclusive projects, more than one project can be selected O True O False stion 7 Compare the machines shown below on the basis of their capitalized cost...
uestion 3 Using PW Analysis, for mutually exclusive projects, more than one project can be selected O True O False stion 7 Compare the machines shown below on the basis of their capitalized cost. Use i-10% per year Machine 1 20,000 9000 4000 Machine 2 First cost,S Annual cost,/year Salvage value, $ Life, years -100,000 -7000 Infinite A.-20000(A/P 1096.3)-9000+4000WF,1096,3) B. $-15832.40 C. $-170,000 D. 1 E. $-180,000 F. 2 G. S-166,540 Equation for AW1- Answer 2 decimals) + Selection-
uestion...
1. When evaluating multiple alternatives or projects, against what must they be compared, if they are...
1. When evaluating multiple alternatives or projects, against what must they be compared, if they are (a) independent, and (b) mutually exclusive? (5 pts) 2. Define the term capitalized cost and give a real-world example of something that might be analyzed using a capitalized cost evaluation technique. (5 pts) 3. After you have conducted a future worth comparison of alternatives, what do you multiply the FW values by in order to obtain the AW values of the alternatives? (5 pts)...
TRUE/FALSE. Write 'T' If the statement is true and 'F if the statement is false 1)...
TRUE/FALSE. Write 'T' If the statement is true and 'F if the statement is false 1) A liability is a probable future payment of assets or services that a company is presently obligated to make as a result of past transactions or events. 2) Obligations not due within one year are reported as current liabilities. 3) A bond with a par value of $1,000 trading at 101% sells for a premium. 4) An advantage of bond financing is that issuing...
A native company, makes tasty seafood dumplings and is considering two alternatives to automate its production...
A native company, makes tasty seafood dumplings and is considering two alternatives to automate its production process. The data are included below: Alt 1 Alt 2 WWMWAN WINNE Initial cost $42,500 $70,000 annual cost (o&m) $6,000 $4,000 Annual savings $18,500 $20,000 Residual value $12,000 $25,000 Useful life 3 years Recommend the alternative you find most attractive to this company. Do the analysis using the techniques of present net worth and annual equivalent value 6 years
True or False: Annuities are unequal cash flows that go on for a finite period of...
True or False: Annuities are unequal cash flows that go on for a finite period of time. True or False: We can determine which “PMT” we’re being asked to solve for by noting what the problem provides in terms of r and n. True or False: "When given the annual withdrawals desired during the retirement period, the FVA tells us the amount we should have accumulated by the time we begin the retirement period. True or False: Given the...
Question 1 If you know the future value or worth of something and would like to...
Question 1 If you know the future value or worth of something and would like to know what its present value or worth is, which interest factor could you use? Present worth factor for a uniform series Capital recovery factor Present worth factor for a single payment Compound amount factor Question 2 If you are given a series of payments into the future and want to know their present value or worth, what is the best interest factor to use?...
3. We discussed in class the fact that when it comes to calculating the Annual Worth (AW) of alternatives have different lives. Why the AW calculations and analyses are done this way compared to those of the Present Worth (PW) and the Future worth (FW) analyses alternatives, we bse the actual life (n) for each alternative even if the and calculations? 4. A small company would like to set aside the amount of $90,000 now to purchase a new piece...
Question 2 (1 point) A tabulation of incremental cash flow between two different-life alternatives must be prepared over the LCM of their lives. True False Question 3 (1 point) In evaluating mutually exclusive alternatives on the basis of rate of return, it is necessary to conduct an "Incremental ROR"in order to obtain the same ranking as the PW and AW methods True False Question 7 (1 point) When an incremental rate of return analysis is conducted correctly, the alternative identified...
1.) Two alternatives are being considered to perform a given job. Both of these alternatives provide equal service. The cost data for each alternative are provided in the tables below: Alternative 1 900,000 100,000 Alternative 2 300,000 30,000 Initial Cost Salvage Value Life, years Annual cost of operation and maintenance Required return 15,000 20,000 20 T20 Use a conventional cost comparison and determine: (a) An equivalent annual cost comparison assuming infinite service need. Which one do you choose? Why? (b)...
uestion 3 Using PW Analysis, for mutually exclusive projects, more than one project can be selected O True O False stion 7 Compare the machines shown below on the basis of their capitalized cost. Use i-10% per year Machine 1 20,000 9000 4000 Machine 2 First cost,S Annual cost,/year Salvage value, $ Life, years -100,000 -7000 Infinite A.-20000(A/P 1096.3)-9000+4000WF,1096,3) B. $-15832.40 C. $-170,000 D. 1 E. $-180,000 F. 2 G. S-166,540 Equation for AW1- Answer 2 decimals) + Selection-
uestion...
1. When evaluating multiple alternatives or projects, against what must they be compared, if they are (a) independent, and (b) mutually exclusive? (5 pts) 2. Define the term capitalized cost and give a real-world example of something that might be analyzed using a capitalized cost evaluation technique. (5 pts) 3. After you have conducted a future worth comparison of alternatives, what do you multiply the FW values by in order to obtain the AW values of the alternatives? (5 pts)...
TRUE/FALSE. Write 'T' If the statement is true and 'F if the statement is false 1) A liability is a probable future payment of assets or services that a company is presently obligated to make as a result of past transactions or events. 2) Obligations not due within one year are reported as current liabilities. 3) A bond with a par value of $1,000 trading at 101% sells for a premium. 4) An advantage of bond financing is that issuing...
A native company, makes tasty seafood dumplings and is considering two alternatives to automate its production process. The data are included below: Alt 1 Alt 2 WWMWAN WINNE Initial cost $42,500 $70,000 annual cost (o&m) $6,000 $4,000 Annual savings $18,500 $20,000 Residual value $12,000 $25,000 Useful life 3 years Recommend the alternative you find most attractive to this company. Do the analysis using the techniques of present net worth and annual equivalent value 6 years
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