Homework Answers
Ans: All of the above options
Explanation:
Since present worth of all the projects are in positive value thats why all the projects should be selected.
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QUESTION 6 A program manager is examining several solution alternatives for a service project --so the...
When will the conventional payback method and discounted payback method yield the same result? A. Always...
When will the conventional payback method and discounted payback method yield the same result? A. Always B. Never C. If and only if the interest (discount) rate for the discounted payback method is much lower than the conventional method. D. No conclusions can be drawn based on the statement. E. When the interest rate is zero. Two mutually exclusive project alternatives are being considered, where both project lives are shorter than the infinite project analysis period. The first alternative has...
* Question Completion Status: Mutually Exclusive Alternative Four mutually exclusive alternatives are being evaluated, and their...
* Question Completion Status: Mutually Exclusive Alternative Four mutually exclusive alternatives are being evaluated, and their costs and revenues are itemized in Table a. If the MARR is 15% per year and the analysis period is 12 years, use the PW method to determine which alternatives are economically acceptable and which one should be selected? Capital Investment Annual Revenues less expenses Market Value (end of useful life) Useful life (years) $150,000 15,200 10,000 $125,000 31,900 $200,000 35,900 15,000 $100,000 41,500...
Assume a mutually exclusive scenario. Compare three alternatives on the basis of their capitalized cost (CC)...
Assume a mutually exclusive scenario. Compare three alternatives on the basis of their capitalized cost (CC) at i=10% per year, which is the best alternative in this scenario? • Alternative 1, AW = $87,500 and n = (forever) • Alternative 2, PW = -$895,000 and n = (forever) • Alternative 3, First cost (FC) of $900,000, annual operating savings of 3,000 per year, salvage = $200,000, and n = (forever) Alternative 2 Alternative 3 None of them Alternative 1 QUESTION...
Question 1 (1 point) Saved The rate of return calculated from an incremental analysis represents ...
Question 1 (1 point) Saved The rate of return calculated from an incremental analysis represents the rate of return obtainable on the extra investment of the higher initial cost alternative. e True False Question 2 (1 point) When the mutually exclusive alternatives under consideration have only disbursements (service alternatives), the do nothing alternative must be included so that a rate of return analysis can be conducted on the incremental cash flow True False Question 3 (1 point) When more than...
4. [9pts] Your company is considering two mutually exclusive alternatives for an improvement project. Do nothing is...
4. [9pts] Your company is considering two mutually exclusive alternatives for an improvement project. Do nothing is an option. Option A costs $100,000 to implement, has a life of 4 years with no appreciable salvage value, while Option B costs $150,000 to implement, has a life of 5 years, and an expected salvage of $25,000. Option A has cost savings of $40,000 per year; Option B has initial cost savings in year 1 of $50,000 decreasing by $4,000 per year...
Question 1 (25 points): An investor has two investment alternatives, Project A and Project B, that...
Question 1 (25 points): An investor has two investment alternatives, Project A and Project B, that are mutually exclusive. Other investment opportunities also exist at 10% minimum rate of return. Cash flows for Project A and B are as follows. Which project is a better investment on the basis of NPV and IRR analysis? It is recommended that one apply incremental analysis techniques. Project A: C=-5,000 C=-3,500 1 01-3,000 1-3,000 13,000 1=2,500 1-2,500 1-2,500 1-3,000 ,0 00 2 3 L-$8,500...
A small construction project having a useful life of 5 years has five mutually exclusive alternatives....
A small construction project having a useful life of 5 years has five mutually exclusive alternatives. With an MARR of 6% and using incremental IRR which alternative should be selected? Note: First solve for the IRR for each alternative. You may use a spreadsheet to iterate to solve, but solve for the IRR for Alternative II 'by hand' by iterating between the interest rate tables in the back of the book. Alternatives III $400 $90 Initial Cost Uniform Annual Benefit...
please solve in word format Answer the question. Consider the three mutually exclusive alternatives below. Determine...
please solve in word format
Answer the question. Consider the three mutually exclusive alternatives below. Determine which alternative is preferable at an interest rate of 10% per year. Assume all of these projects are repeating perpetually, Alternative A B C Capital investment $400,000 $100,000 $150,000 Annual expense $189,000 $94,500 $134,000 Annual revenue $309,000 $204,500 $300,000 Salvage value $65,000 $50,000 $100,000 Life, years | 24 36 12 1 i FBI , O EE % 5 % Solution: AW(M) - -400,000 (A/P,...
Question 1 (1 point) Saved The rate of return calculated from an incremental analysis represents the...
Question 1 (1 point) Saved The rate of return calculated from an incremental analysis represents the rate of return obtainable on the extra investment of the higher initial cost alternative. e True False Question 2 (1 point) When the mutually exclusive alternatives under consideration have only disbursements (service alternatives), the do nothing alternative must be included so that a rate of return analysis can be conducted on the incremental cash flow True False Question 3 (1 point) When more than...
solve in word format Answer the question. onsider the three mutually exclusive alternatives below. Determine which...
solve in word format
Answer the question. onsider the three mutually exclusive alternatives below. Determine which alternative is preferable at an terest rate of 10% per year. Assume all of these projects are repeating perpetually. Alternative A B C Capital investment $400,000 $100,000 $150,000 Annual expense $189,000 $94,500 $134,000 $309,000 $204,500 $300,000 $50,000 $100,000 Annual revenue Salvage value Life, years $65,000 24 36 12 X E B I i Fr
* Question Completion Status: Mutually Exclusive Alternative Four mutually exclusive alternatives are being evaluated, and their costs and revenues are itemized in Table a. If the MARR is 15% per year and the analysis period is 12 years, use the PW method to determine which alternatives are economically acceptable and which one should be selected? Capital Investment Annual Revenues less expenses Market Value (end of useful life) Useful life (years) $150,000 15,200 10,000 $125,000 31,900 $200,000 35,900 15,000 $100,000 41,500...
Assume a mutually exclusive scenario. Compare three alternatives on the basis of their capitalized cost (CC) at i=10% per year, which is the best alternative in this scenario? • Alternative 1, AW = $87,500 and n = (forever) • Alternative 2, PW = -$895,000 and n = (forever) • Alternative 3, First cost (FC) of $900,000, annual operating savings of 3,000 per year, salvage = $200,000, and n = (forever) Alternative 2 Alternative 3 None of them Alternative 1 QUESTION...
Question 1 (1 point) Saved The rate of return calculated from an incremental analysis represents the rate of return obtainable on the extra investment of the higher initial cost alternative. e True False Question 2 (1 point) When the mutually exclusive alternatives under consideration have only disbursements (service alternatives), the do nothing alternative must be included so that a rate of return analysis can be conducted on the incremental cash flow True False Question 3 (1 point) When more than...
4. [9pts] Your company is considering two mutually exclusive alternatives for an improvement project. Do nothing is an option. Option A costs $100,000 to implement, has a life of 4 years with no appreciable salvage value, while Option B costs $150,000 to implement, has a life of 5 years, and an expected salvage of $25,000. Option A has cost savings of $40,000 per year; Option B has initial cost savings in year 1 of $50,000 decreasing by $4,000 per year...
Question 1 (25 points): An investor has two investment alternatives, Project A and Project B, that are mutually exclusive. Other investment opportunities also exist at 10% minimum rate of return. Cash flows for Project A and B are as follows. Which project is a better investment on the basis of NPV and IRR analysis? It is recommended that one apply incremental analysis techniques. Project A: C=-5,000 C=-3,500 1 01-3,000 1-3,000 13,000 1=2,500 1-2,500 1-2,500 1-3,000 ,0 00 2 3 L-$8,500...
A small construction project having a useful life of 5 years has five mutually exclusive alternatives. With an MARR of 6% and using incremental IRR which alternative should be selected? Note: First solve for the IRR for each alternative. You may use a spreadsheet to iterate to solve, but solve for the IRR for Alternative II 'by hand' by iterating between the interest rate tables in the back of the book. Alternatives III $400 $90 Initial Cost Uniform Annual Benefit...
please solve in word format
Answer the question. Consider the three mutually exclusive alternatives below. Determine which alternative is preferable at an interest rate of 10% per year. Assume all of these projects are repeating perpetually, Alternative A B C Capital investment $400,000 $100,000 $150,000 Annual expense $189,000 $94,500 $134,000 Annual revenue $309,000 $204,500 $300,000 Salvage value $65,000 $50,000 $100,000 Life, years | 24 36 12 1 i FBI , O EE % 5 % Solution: AW(M) - -400,000 (A/P,...
Question 1 (1 point) Saved The rate of return calculated from an incremental analysis represents the rate of return obtainable on the extra investment of the higher initial cost alternative. e True False Question 2 (1 point) When the mutually exclusive alternatives under consideration have only disbursements (service alternatives), the do nothing alternative must be included so that a rate of return analysis can be conducted on the incremental cash flow True False Question 3 (1 point) When more than...
solve in word format
Answer the question. onsider the three mutually exclusive alternatives below. Determine which alternative is preferable at an terest rate of 10% per year. Assume all of these projects are repeating perpetually. Alternative A B C Capital investment $400,000 $100,000 $150,000 Annual expense $189,000 $94,500 $134,000 $309,000 $204,500 $300,000 $50,000 $100,000 Annual revenue Salvage value Life, years $65,000 24 36 12 X E B I i Fr
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