Three mutually exclusive projects are being considered: A B &nb
Three mutually exclusive projects are being considered:
A B C
Initial cost $100 $150 $200
Annual benefit $10 $17.62 $55.48
Useful life. infinite 20 years 5 years
- Construct a choice table for interest rates from 0%-100%. Also – provide a plot of either PW or EAW as a function of i.
b. The firm wants 8% rate of return on investments. Which equipment should be purchased?
Homework Answers
a.
Please refer to below spreadsheet for choice table for interest rate 0% - 100% and also plot for Net Present worth against interest rate.
![G11 (84.13) ($122.03) ($119 59 S (HA.H) (S122.47) ($120.62) S (HASV) ($122.89) ($121.63) 5 (84.85) ($123.30 ($122.61) S (Hii) (S123.70) ($123.57) $1 29) ($124.09) ($124.51) S (Hiii) (124.46) ($125.43) S (Hifi) ($124.83) (S126.32) S (HiV) ($125.18) (S127.20) S (i11) (S125.53) ($128.06) ^ (Hi:) (S125.86) ($128.90) S(WİA!) ($126.19) ($129.73) s(Wi/) ($126.51) ($130.53) $1撰ǐA4) ($126.82) ($131.32) S(H/) ($127.12) ($132.10) S(H/1H) (127.41) (S132.85) S (H/:H) ($127.70) ($133.59) S (H/4) (127.98) (S134.32) $18/Ri] ($128.25) ($135.03) S (H/H) ($128.51) ($135.73) S(H/) ($128.77) ($136.41] s《w.10) ($129.02) ($137.08) S (HHA) ($129.27) ($137.74) S (HHiS) (S129.51) (S138.39) $1KKN1) ($129.75) ($139.02) $1XXǐ ) ($129.98) ($139.64) 5 (88.76) ($130.20 ($140.25) $ (88.89) ($130.42 ($140.85) S(H) ($130.64) (S141.43) $1觀11i) ($130.85) ($142.01) $18925) ($131.05) ($142.57) S (H:«) (S131.26) ($143.13) S(HA) (S131.45) ($143.67) $189!選) ($131.65) ($144.21) $189砌($131.84) ($144.73) 5 (89.80) ($132.02 ($145.25) 63% 64% 72 666( 67% 68% 71% 72% 73% 74% 75% 76% 77% 78% 79% 84 85 81% 82% 83% 84% 85% 86% 87% 89 92 93 94 95 31 100 101 102 103 104 105 91%(89.01 92% 93% 94% 95% 96% 97% 98% ($132.20) ($145.76) 102 108 5 (89.90) 100% (90.00)($132.38) ($146.25)](http://img.homeworklib.com/questions/473a6c40-788d-11ea-bcfa-af02ad1b1f34.png?x-oss-process=image/resize,w_560)
Formula Reference-
b.
Computation of Net Present worth at 8% of Equipment A , B & C and recommendation
Formula Reference -
Equipment-A has highest NPW thus, A is recommended.
You can also get same answer in choice table constructed above in answer (a).
Three mutually exclusive alternatives are being considered: Initial cost Benefit at end of the first $500...
Three mutually exclusive alternatives are being considered: Initial cost Benefit at end of the first $500 $400 $300 200 200 200 year Uniform benefit at end of 100 125 100 subsequent years Useful life, in years 4 At the end of its useful life, an alternative is not replaced. If the MARR is 10%, which alternative should be selected (a) Based on the payback period? (b) Based on benefit-cost ratio analysis?
Do not use Excel or tables 9-54 Three mutually exclusive alternatives are being considered: Initial cost...
Do not use Excel or tables
9-54 Three mutually exclusive alternatives are being considered: Initial cost Benefit at end of the first $500 $400 $300 200 200 200 100 4 year Uniform benefit at end of 100 125 subsequent years Useful life, in years At the end of its useful life, an alternative is not replaced. If the MARR is 10%, which alternative should be selected (a) Based on the payback period? (b) Based on benefit-cost ratio analysis?
Need cash flow diagram 04) Three mutually exclusive alternative are being considered Initial Cost Benefit at the end of the first Year Uniform Annual Benefits at end of subsequent years Useful Lif...
Need cash flow diagram
04) Three mutually exclusive alternative are being considered Initial Cost Benefit at the end of the first Year Uniform Annual Benefits at end of subsequent years Useful Life in years $500 $200 $100 $400 $200 $125 $300 $200 $100 At the end of its useful life, an alternative is not replaced. If MARR is 10%, which alternatives should be selected? a) Based on the payback period? b) Based on benefit-cost ratio analysis c) Benefit/Costs Analysis using...
9-54 Three mutually exclusive alternatives are beine A considered: $500 $400 $300 200 100 Initial...
9-54 Three mutually exclusive alternatives are beine A considered: $500 $400 $300 200 100 Initial cost Benefit at end of the first 200 200 year Uniform benefit at end of 100 125 subsequent years Useful life, in years 4 At the end of its useful life, an alternative is not replaced. If the MARR is 10%, which alternative should be selected (a) Based on the payback period? (b) Based on benefit-cost ratio analysis?
9-54 Three mutually exclusive alternatives are beine...
ANSWER THE FOLLOWING QUESTIONS:- Three mutually exclusive design alternatives are being considered. The estimated cash...
ANSWER THE FOLLOWING QUESTIONS:-
Three mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are given. The interest rate is 20% per year. At the conclusion of the useful life, the investment will be sold A C Investment cost $28,000 $55,000 $13,000 $28,000 $8,000 $40,000 Annual expenses Annual revenues $15,000 $23,000 $6,000 10 years $22,000 $32,000 13 $10,000 Salvage value Useful life 10 years 10 years A decision-maker can select one of these alternatives or...
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%
13. Two mutually exclusive projects are being considered: Project X requires $500 and results in a...
13. Two mutually exclusive projects are being considered: Project X requires $500 and results in a return amounting to a one-time-only profit of $1,000 five years from now. Project Y also requires $500, but will return $170 per year for each of the next 5 years. Determine at what rate of return the two projects are equivalent and explain the significance of the intersection point of the two PW profiles for the selection of the preferred alternative
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...
4. Project Selection 20 points) Three mutually exclusive projects are being considered. The cash flows for...
4. Project Selection 20 points) Three mutually exclusive projects are being considered. The cash flows for each project are shown below. Use an MARR of 12% per year. Which of the three alternatives, if any, should be chosen? Why? State any assumptions required. 17.000 First cost, $ Annual revenue, $/yr Salvage value, $ Useful life, yr 12.000 6,000 4,000 26,200 8,200 4,500 4,500 5,200 3 6 4
consider three mutually exclusive alternatives that have a uniform annual this is the whole question. no...
consider three mutually exclusive alternatives that have a
uniform annual
this is the whole question. no additional information available.
please help.
-22 Consider three mutually exclusive alternatives that have a uniform annual benefit of $420. The analysis period is 8 years. Assume identical replacements and construct a choice table for interest rates from 0% to 100%. OfficeSt (a) De fro (b) If pla (a) Assume doing nothing is allowed. (b) Assume A, B, or C must be chosen. 8-26 Consi...
Three mutually exclusive alternatives are being considered: Initial cost Benefit at end of the first $500 $400 $300 200 200 200 year Uniform benefit at end of 100 125 100 subsequent years Useful life, in years 4 At the end of its useful life, an alternative is not replaced. If the MARR is 10%, which alternative should be selected (a) Based on the payback period? (b) Based on benefit-cost ratio analysis?
Do not use Excel or tables
9-54 Three mutually exclusive alternatives are being considered: Initial cost Benefit at end of the first $500 $400 $300 200 200 200 100 4 year Uniform benefit at end of 100 125 subsequent years Useful life, in years At the end of its useful life, an alternative is not replaced. If the MARR is 10%, which alternative should be selected (a) Based on the payback period? (b) Based on benefit-cost ratio analysis?
Need cash flow diagram
04) Three mutually exclusive alternative are being considered Initial Cost Benefit at the end of the first Year Uniform Annual Benefits at end of subsequent years Useful Life in years $500 $200 $100 $400 $200 $125 $300 $200 $100 At the end of its useful life, an alternative is not replaced. If MARR is 10%, which alternatives should be selected? a) Based on the payback period? b) Based on benefit-cost ratio analysis c) Benefit/Costs Analysis using...
9-54 Three mutually exclusive alternatives are beine A considered: $500 $400 $300 200 100 Initial cost Benefit at end of the first 200 200 year Uniform benefit at end of 100 125 subsequent years Useful life, in years 4 At the end of its useful life, an alternative is not replaced. If the MARR is 10%, which alternative should be selected (a) Based on the payback period? (b) Based on benefit-cost ratio analysis?
9-54 Three mutually exclusive alternatives are beine...
ANSWER THE FOLLOWING QUESTIONS:-
Three mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are given. The interest rate is 20% per year. At the conclusion of the useful life, the investment will be sold A C Investment cost $28,000 $55,000 $13,000 $28,000 $8,000 $40,000 Annual expenses Annual revenues $15,000 $23,000 $6,000 10 years $22,000 $32,000 13 $10,000 Salvage value Useful life 10 years 10 years A decision-maker can select one of these alternatives or...
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%
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...
4. Project Selection 20 points) Three mutually exclusive projects are being considered. The cash flows for each project are shown below. Use an MARR of 12% per year. Which of the three alternatives, if any, should be chosen? Why? State any assumptions required. 17.000 First cost, $ Annual revenue, $/yr Salvage value, $ Useful life, yr 12.000 6,000 4,000 26,200 8,200 4,500 4,500 5,200 3 6 4
consider three mutually exclusive alternatives that have a
uniform annual
this is the whole question. no additional information available.
please help.
-22 Consider three mutually exclusive alternatives that have a uniform annual benefit of $420. The analysis period is 8 years. Assume identical replacements and construct a choice table for interest rates from 0% to 100%. OfficeSt (a) De fro (b) If pla (a) Assume doing nothing is allowed. (b) Assume A, B, or C must be chosen. 8-26 Consi...
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