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1.- You have the following three investment opportunities: 2 Capital Investment: Useful Life: Annual sales Variable...
Consider a project with a capital investment of $47,600, useful life of 9 years, annual revenue...
Consider a project with a capital investment of $47,600, useful life of 9 years, annual revenue of $1,720, and salvage value of $5067 at the end of its useful life. The MARR is 20%. Compute the AW (annual worth) of the project.
Two investment opportunities are as follows А $150 B $100 22.25 First cost Initial investment) Uniform...
Two investment opportunities are as follows А $150 B $100 22.25 First cost Initial investment) Uniform annual benefit End-of-useful-life salvage value Useful life, in years 20 15 10 At the end of 10 years, Alt. B is not replaced. Thus, the comparison is 15 years of A versus 10 years of B. If the MARR is 10%, which alternative should be selected?
A B capital investment 50000 65000 annual expenses 9000 8000 annual revenues 22000 24000 salvage value...
A B capital investment 50000 65000 annual expenses 9000 8000 annual revenues 22000 24000 salvage value 13000 20000 useful life 8 year 8 year A_ Calculate the payback period of each alternative and decide the best alternative without taking into account the time value of the money B- Use conventional benefit cost ratio analysis to define which alternative should be selected. C-Use modified benefit cost ratio to define which alternative should be selected (MARR %10)
Consider an alternative with the following cash flows. Capital Investment Revenues Annual Expenses Market Value Useful...
Consider an alternative with the following cash flows. Capital Investment Revenues Annual Expenses Market Value Useful Life MARR = € $45,000 $5000 at the end of the first year increasing by $2000 per year for the next 9 years $2000 $4500 10 years 10% Using ERR, is this a good alternative or a bad alternative? How do you know?
2) Two mutually exclusive design alternatives are being considered, with each one having a useful life...
2) Two mutually exclusive design alternatives are being considered, with each one having a useful life of 10 years. The estimated sales and cost data for each alternative are shown. Annual revenues are based on the number of units sold and the selling price. Annual expenses are based on the fixed and variable costs. If the MARR is 20% per year, determine which alternative is preferable based on the PW Method. 12 Investment cost Units to be sold each year...
2) Two mutually exclusive design alternatives are being considered, with each one having a useful life...
2) Two mutually exclusive design alternatives are being considered, with each one having a useful life of 10 years. The estimated sales and cost data for each alternative are shown. Annual revenues are based on the number of units sold and the selling price. Annual expenses are based on the fixed and variable costs. If the MARR is 20% per year, determine which alternative is preferable based on the PW Method. 12 Investment cost Units to be sold each year...
Question 2. (30 points) You have 3 capital investment alternatives that are expected to increase the company's income a...
Question 2. (30 points) You have 3 capital investment alternatives that are expected to increase the company's income as described in the table below. Assume repeatability and an 8% MARR. Use the most appropriate method to select the most feasible alternative and mark your choice by changing the text color to red below. All appropriate cells must contain formulas. Alternative A Alternative B Alternative C А Investment Useful life Annual revenues Annual costs $10,000 10 years $7,000 $2,000 $9,000 9...
For the following table, assume a MARR of 12% per year and a useful life for...
For the following table, assume a MARR of 12% per year and a useful life for each alternative of eight years which equals the study period. The rank-order of alternatives from least capital investment to greatest capital investment is Z ·Y? W? X Complete the incremental analysis by selecting the prefer ed altemative. Do nothing" is not an option. $250 $400 $100 Capital investment ? Annual cost savings ? Market value ? PW (12%) 70 100 138 90 50 67...
U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of...
U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Project Bono Project Edge Project Clayton Capital investment $164,800 $180,250 $202.000 Annual net income: Year 1 14.420 18,540 27,810 14,420 17,510 23,690 14,420 16,480 21,630 14,420 + 13,390 12,360 14,420 9,270 12,360 Total $72,100 $74,160 $98,880 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%....
U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of...
U3 Company is considering three long-term capital investment
proposals. Each investment has a useful life of 5 years. Relevant
data on each project are as follows.
Project Bono
Project Edge
Project Clayton
Capital investment
$161,600
$176,750
$204,000
Annual net income:
Year 1
14,140
18,180
27,270
2
14,140
17,170
23,230
3
14,140
16,160
21,210
4
14,140
12,120
13,130
5
14,140
9,090
12,120
Total
$70,700
$72,720
$96,960
Depreciation is computed by the straight-line method with no
salvage value. The company’s cost of capital...
Two investment opportunities are as follows А $150 B $100 22.25 First cost Initial investment) Uniform annual benefit End-of-useful-life salvage value Useful life, in years 20 15 10 At the end of 10 years, Alt. B is not replaced. Thus, the comparison is 15 years of A versus 10 years of B. If the MARR is 10%, which alternative should be selected?
Consider an alternative with the following cash flows. Capital Investment Revenues Annual Expenses Market Value Useful Life MARR = € $45,000 $5000 at the end of the first year increasing by $2000 per year for the next 9 years $2000 $4500 10 years 10% Using ERR, is this a good alternative or a bad alternative? How do you know?
2) Two mutually exclusive design alternatives are being considered, with each one having a useful life of 10 years. The estimated sales and cost data for each alternative are shown. Annual revenues are based on the number of units sold and the selling price. Annual expenses are based on the fixed and variable costs. If the MARR is 20% per year, determine which alternative is preferable based on the PW Method. 12 Investment cost Units to be sold each year...
2) Two mutually exclusive design alternatives are being considered, with each one having a useful life of 10 years. The estimated sales and cost data for each alternative are shown. Annual revenues are based on the number of units sold and the selling price. Annual expenses are based on the fixed and variable costs. If the MARR is 20% per year, determine which alternative is preferable based on the PW Method. 12 Investment cost Units to be sold each year...
Question 2. (30 points) You have 3 capital investment alternatives that are expected to increase the company's income as described in the table below. Assume repeatability and an 8% MARR. Use the most appropriate method to select the most feasible alternative and mark your choice by changing the text color to red below. All appropriate cells must contain formulas. Alternative A Alternative B Alternative C А Investment Useful life Annual revenues Annual costs $10,000 10 years $7,000 $2,000 $9,000 9...
For the following table, assume a MARR of 12% per year and a useful life for each alternative of eight years which equals the study period. The rank-order of alternatives from least capital investment to greatest capital investment is Z ·Y? W? X Complete the incremental analysis by selecting the prefer ed altemative. Do nothing" is not an option. $250 $400 $100 Capital investment ? Annual cost savings ? Market value ? PW (12%) 70 100 138 90 50 67...
U3 Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Project Bono Project Edge Project Clayton Capital investment $164,800 $180,250 $202.000 Annual net income: Year 1 14.420 18,540 27,810 14,420 17,510 23,690 14,420 16,480 21,630 14,420 + 13,390 12,360 14,420 9,270 12,360 Total $72,100 $74,160 $98,880 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%....
U3 Company is considering three long-term capital investment
proposals. Each investment has a useful life of 5 years. Relevant
data on each project are as follows.
Project Bono
Project Edge
Project Clayton
Capital investment
$161,600
$176,750
$204,000
Annual net income:
Year 1
14,140
18,180
27,270
2
14,140
17,170
23,230
3
14,140
16,160
21,210
4
14,140
12,120
13,130
5
14,140
9,090
12,120
Total
$70,700
$72,720
$96,960
Depreciation is computed by the straight-line method with no
salvage value. The company’s cost of capital...
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