AW-A: -12,000 (A/P, 12%, 3) + 6000 + 4,000 (A/F, 12%, 3)
AW-A = (-12000 *0.4163 ) + 6000 + (4000 *0.2963) = 2189.21
AW-B: -26,200 (A/P, 12%,6) + 8200 + 4,500 (A/F, 12%,6)
AW-B: (-26,200 * 0.2432) + 8200 + (4,500 * 0.1232) = 2382
AW-C: -17,000(A/P, 12%,4) + 4500 + 5,200 (A/F, 12%,4)
AW-C: (-17,000 * 0.3292)+ 4500 + (5,200 * 0.2092) = -8.97
Thus choose Option-A
4. Project Selection 20 points) Three mutually exclusive projects are being considered. The cash flows for...
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...
2. Two projects being considered are mutually exclusive and have the following projected cash flows:. If the required rate of return on these projects is 11 percent, which would be chosen and why? Project A Project B Year Cash Flow Cash Flow 0 -40,000 -40,000 1 15,625 0 2 15,625 0 3 15,625 0 4 15,625 0 5 15,625 99,500 3. Two projects being considered are mutually exclusive and have the following projected cash flows:. If the required rate of...
1. Two projects being considered are mutually exclusive and have the following cash flows: Year 0 Project A -$50,000 15,000 15,000 15,000 15,000 15.000 Project B -$50,000 0 0 1 0 4 15 0 99,000 If the required rate of return on these projects is 10 percent, which would be chosen and why?
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...
An airline is evaluating two projects that are mutually exclusive with initial investments and cash flows as follows: Year Cash Flows (A) Cash Flows (B) 0 1 2 3 4 5 -$18,500 4,500 4,500 4,500 4,500 4,000 -$16,490 4,000 4,000 4,000 4,000 4,000 According to the above table, what is the IRR of project (A)? A) 3% B) 6% C) 9% D) None of the above.
Question 14 (2 points) 1. Two projects being considered are mutually exclusive and have the following cash flows: Year Project A Project B 0 -$50,000 -$50,000 15,000 0 2 15,000 0 3 15,000 0 4 15,000 5 15,000 99,000 1 0 If the required rate of return on these projects is 10 percent, which would be chosen and why?
USE ANNUAL WORTH Analysis Two mutually exclusive design alternatives are being considered. The estimated cash flows for each alternative are given in the following table with MARR = 10% per year. Suggest your recommendation by using multiple attribute annual worth AW analysis. Design A Design B Investment cost (RM) 28,000 55,000 One-off expenses 10,000 13,000 In year 4 (RM) Annual revenues (RM) 22,000 28,000 Market value (RM) 6,000 8,000 Useful life 10 years 6 years
Question 3 (10 marks) a) Six mutually exclusive projects A-F are being considered by a company. They have been ordered by first costs so that project A has the lowest first cost, and F the highest. The table below provides information on the IRR and incremental IRR of each investment. For example, the IRR of C is 11 % ; the incremental IRR going from A to C is 13 % and the incremental IRR from B to C is...
4. (10 points) A firm is considering three mutually exclusive alternatives as part of a production improvement program. The alternatives are: Initial Cost $20,000 $30,000 $50,000 Uniform Annual Benefit $4,000 $5,000 $6,500 Useful Life Salvage Value $2,000 $9,000 The MARR is 10%. Which alternative do you recommend? Be sure to use the proper technique when comparing alternatives with different useful lives.
Three mutually exclusive investment alternatives are being considered. The estimated cash flows for each wernative we given below. The study period is 30 years and the firm's MARR is 6% per year. Assume repeatability and reinvestment of positive cash balances at 6 per year a. What is the simple payback period for Alternative 1? b. What is the annual worth of Alternative 2? c. What is the IRR of the incremental cash flows of Alternative 2 compared to Aheative 1?...