Homework Answers
| Time (year) | Cash Flow | Design A | Design B | Incremental Cash Flow(B-A) |
| 0 | C0 | -3500 | -5000 | -1500 |
| 1 | C1 | 1255 | 1480 | 225 |
| 2 | C2 | 1255 | 1480 | 225 |
| 3 | C3 | 1255 | 1480 | 225 |
| 4 | C4 | 1255 | 1480 | 225 |
| 5 | C5 | 1480 | 1480 | |
| 6 | C6 | 1480 | 1480 |
The formula is
Putting Values of incremental Cash Flow
IRR = 23.06% using excel function IRR
So the incremental IRR is closest to 24%
Add Answer to:
Below are the CFs of 2 design alternatives being considered Design ADesign B $5000 initial cost$3500...
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%
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...
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...
Three mutually exclusive investment alternatives are being considered. The estimated cash flows for each wernative we...
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?...
2. Three mutually exclusive design alternatives are being considered. The estimated sales and cost data for each al...
2. Three mutually exclusive design alternatives are being considered. The estimated sales and cost data for each alternative are given bellow. The MARR is 20% per year. Annual revenues are based on the number of units sold and the selling price. Annual expenses are based on fixed and variable costs. Determine which selection is preferable based on AW. Investment cost $30,000 $60,000 S60,000 20.000 Estimated units to be sold/year 18.000 15.000 $3.50 Unit selling price, 3/unit $4.40 S4.10 Variable costo....
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?
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...
9- Two alternatives with identical benefits are being considered: 49 A B Initial cost $500 $800...
9- Two alternatives with identical benefits are being considered: 49 A B Initial cost $500 $800 Uniform annual cost 200 150 Useful life, in years 8 8 (a) Compute the payback period if Alt. B is purchased rather than Alt. A (b) Use a MARR of 10% and benefit-cost ratio analysis to identify the alternative that should be selected
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. 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...
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...
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?...
2. Three mutually exclusive design alternatives are being considered. The estimated sales and cost data for each alternative are given bellow. The MARR is 20% per year. Annual revenues are based on the number of units sold and the selling price. Annual expenses are based on fixed and variable costs. Determine which selection is preferable based on AW. Investment cost $30,000 $60,000 S60,000 20.000 Estimated units to be sold/year 18.000 15.000 $3.50 Unit selling price, 3/unit $4.40 S4.10 Variable costo....
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?
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...
9- Two alternatives with identical benefits are being considered: 49 A B Initial cost $500 $800 Uniform annual cost 200 150 Useful life, in years 8 8 (a) Compute the payback period if Alt. B is purchased rather than Alt. A (b) Use a MARR of 10% and benefit-cost ratio analysis to identify the alternative that should be selected
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...
Most questions answered within 3 hours.
-
If 5.70 g of potassium react with water, how many grams of
hydrogen gas, H2, are...
asked 2 minutes ago -
How many moles of CO2 and H2O will be
produced by combustion analysis of 0.010 mol...
asked 49 seconds ago -
Tennis champion Maria Sharapova is capable of serving a tennis
ball at 126 mph.
b) What...
asked 8 minutes ago -
The electric potential V in the space between the plates of a
given vacuum tube is...
asked 18 minutes ago -
The Hydroboration-Oxidation of an Alkene to Yield 1-Octanol.
1-octene to 1-octanol using BH3-THF
What might be...
asked 23 minutes ago -
You draw and keep a single bill from a hat that contains a
$11, $55, $20...
asked 40 minutes ago -
Write a Java program that has the following methods:
findSum - a method that takes in...
asked 41 minutes ago -
A coffee cup calorimeter initially contains 135g of water at
22.0oC. Calcium chloride (21.0g) at the...
asked 44 minutes ago -
A patient is having a magnetic resonance imaging scan (an MRI)
and has neglected to remove...
asked 46 minutes ago -
A student takes a multiple-choice test that has 10 questions.
Each question has two choices. The...
asked 1 hour ago -
Willie Keeler has a lifetime batting average of 0.341. Assume
that Willie Keeler came to bat...
asked 1 hour ago -
Which of the following has the highest boiling point?
A) 0.5m NaCl
B) 0.5m C6H12O6
C)...
asked 1 hour ago