Homework Answers
2. True (this is done in order to ensure uniformity and unbiasedness in results)
3. False (This is not true and they can give different results)
7. False (It is not necessarily true)
8. False (They can still be mutually exclusive)
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Question 2 (1 point) A tabulation of incremental cash flow between two different-life alternatives must be...
Question 9 (4 points) When the cash flow of the shemative with the lower In v...
Question 9 (4 points) When the cash flow of the shemative with the lower In v estment is subtracted from that with the ligherita Investment, a rate of return on the Incremental cash flow that equals or exceeds the MARR means the lower Initi Investment alternative is the more attractive True False Question 10 (4 points) In the incremental ROR analysis for multiple mutually exclusive Nternatives. If the Increme ROR is equal or exceed the MARR, the Challenger selected and...
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...
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...
Question 7 (1 point) In evaluating independent projects, no incremental analysis is necessary between projects. Each...
Question 7 (1 point) In evaluating independent projects, no incremental analysis is necessary between projects. Each project is evaluated separately from others, and more than one project can be selected. Therefore, the only comparison is with the do-nothing alternative for each project. Question 7 options: True False 10. Given the following time events and incremental cash flow, if the MARR is 12% per year, which alternative should be selected on the basis of rate of return? Assume alternative B requires...
Problem 1. Three alternative projects with infinite lives are under consideration. Initial costs and cash flows...
Problem 1. Three alternative projects with infinite lives are under consideration. Initial costs and cash flows of each project are shown. MARR is 15% per year. a) Which alternatives will be selected if projects are independent based on ROR analysis? b) Which alternatives will be selected if projects are mutually exclusive based ROR analysis? Show your solution in both cases of a) and b) (Note: A=Pi for infinite n) (You may set PW=0 or AW=0 to find i) Alternatives Initial...
5 Questions 4 through 7 are based on the following statement: 1 tually exclusive alternatives, A...
5 Questions 4 through 7 are based on the following statement: 1 tually exclusive alternatives, A and B, are to be evaluated by the rate of return (ROR) method. The initial Investment for alternative B is greater than that of alternative A. If the overall ROR of alternative A is less than the MARR and the overall rate of return of alternative B is greater than the MARR, then: A) Alternative B should be compared incrementally to alternative A. B)...
Fill in the blank with the given word bank below: In a B/C ratio, an estimate...
Fill in the blank with the given word bank below: In a B/C ratio, an estimate is placed in the denominator when it affects the ___________. In comparing multiple mutually exclusive alternatives by the B/C method, it is usually necessary to conduct a(an) ___________ to identify the best one In a modified B/C ratio, M&O (maintenance and operations) costs are included in the _______________. Incremental analysis Disbenefits Higher Benefit and costs, disbenefits PW analysis over the LCM of lives Numerator...
Consider the following EOY cash flows for two mutually exclusive alternatives (one must be chosen). The...
Consider the following EOY cash flows for two mutually
exclusive alternatives (one must be chosen). The MARR is 5% per
year.
I need the PW of the Lead Acid and Lithium Ion.
Problem 6-28 (algorithmic) EQuestion Help Consider the following EOY cash flows for two mutually exclusive alternatives (one must be chosen) The MARR is 5% per year ead Acid $7,000 thium lon Capital investment Annual expenses Useful life Market value at end of useful life $13,000 $2.500 $2,750 12...
1. True or False. When we use the Rate of Return Method in evaluating more than...
1. True or False. When we use the Rate of Return Method in evaluating more than one alternative, we cannot compare the IRR of mutually exclusive alternatives (or IRR of the differences between mutually exclusive alternatives) against those of other alternatives. Explain your answer.
Please show work. Thank you QUESTION 2 The best alternative among the four mutually exclusive alternatives...
Please show work. Thank
you
QUESTION 2 The best alternative among the four mutually exclusive alternatives in the table below is alternative A. Alternative EUAW D (Do-nothing) $15,000 $5,000-$10,000 0 True False
Question 9 (4 points) When the cash flow of the shemative with the lower In v estment is subtracted from that with the ligherita Investment, a rate of return on the Incremental cash flow that equals or exceeds the MARR means the lower Initi Investment alternative is the more attractive True False Question 10 (4 points) In the incremental ROR analysis for multiple mutually exclusive Nternatives. If the Increme ROR is equal or exceed the MARR, the Challenger selected and...
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...
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...
Problem 1. Three alternative projects with infinite lives are under consideration. Initial costs and cash flows of each project are shown. MARR is 15% per year. a) Which alternatives will be selected if projects are independent based on ROR analysis? b) Which alternatives will be selected if projects are mutually exclusive based ROR analysis? Show your solution in both cases of a) and b) (Note: A=Pi for infinite n) (You may set PW=0 or AW=0 to find i) Alternatives Initial...
5 Questions 4 through 7 are based on the following statement: 1 tually exclusive alternatives, A and B, are to be evaluated by the rate of return (ROR) method. The initial Investment for alternative B is greater than that of alternative A. If the overall ROR of alternative A is less than the MARR and the overall rate of return of alternative B is greater than the MARR, then: A) Alternative B should be compared incrementally to alternative A. B)...
Consider the following EOY cash flows for two mutually
exclusive alternatives (one must be chosen). The MARR is 5% per
year.
I need the PW of the Lead Acid and Lithium Ion.
Problem 6-28 (algorithmic) EQuestion Help Consider the following EOY cash flows for two mutually exclusive alternatives (one must be chosen) The MARR is 5% per year ead Acid $7,000 thium lon Capital investment Annual expenses Useful life Market value at end of useful life $13,000 $2.500 $2,750 12...
1. True or False. When we use the Rate of Return Method in evaluating more than one alternative, we cannot compare the IRR of mutually exclusive alternatives (or IRR of the differences between mutually exclusive alternatives) against those of other alternatives. Explain your answer.
Please show work. Thank
you
QUESTION 2 The best alternative among the four mutually exclusive alternatives in the table below is alternative A. Alternative EUAW D (Do-nothing) $15,000 $5,000-$10,000 0 True False
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