Homework Answers
AW for A = - 30000 * (A/P, 20%,10) + 15000 * 3.50 - 15000 * 1 - 15000
= - 30000 * 0.238523 + 15000 * 3.50 - 15000 * 1 - 15000
= 15344.32
AW for B = - 60000 * (A/P, 20%,10) + 20000 * 4.40 - 20000 * 1.40 - 30000 + 20000 * (A/F, 20%,10)
= - 60000 * 0.238523 + 20000 * 4.40 - 20000 * 1.40 - 30000 + 20000 * 0.038523
= 16459.09
AW for C = - 50000 * (A/P, 20%,10) + 18000 * 4.10 - 18000 * 1.15 - 26000 + 15000 * (A/F, 20%,10)
= - 50000 * 0.238523 + 18000 * 4.10 - 18000 * 1.15 - 26000 + 15000 * 0.038523
= 15751.70
AW for B is highest, so it should be selected
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2. Three mutually exclusive design alternatives are being considered. The estimated sales and cost data for each al...
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...
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...
USE ANNUAL WORTH Analysis Two mutually exclusive design alternatives are being considered. The estimated cash flows...
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
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...
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?...
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 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?
Do not use Excel or tables 9-54 Three mutually exclusive alternatives are being considered: Initial cost...
Do not use Excel or tables
9-54 Three mutually exclusive alternatives are being considered: Initial cost Benefit at end of the first $500 $400 $300 200 200 200 100 4 year Uniform benefit at end of 100 125 subsequent years Useful life, in years 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?
Kanban company estimated sales of 40 000 units at R6 each. Budgeted cost of goods sold...
Kanban company estimated sales of 40 000 units at R6 each. Budgeted cost of goods sold per unit includes R1,20 of direct materials, six minutes of direct labour time at R15 per hour, and unit overhead cost of R1,30. Kanban pays a sales commission of 10% of sales revenue. Fixed selling and administrative expenses are budgeted at R25 000. Prepare a budgeted income statement showing Sales, Less cost of sales =gross profit, less operating expenses, sales commission, fixed selling and...
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...
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...
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
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...
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?...
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 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?
Do not use Excel or tables
9-54 Three mutually exclusive alternatives are being considered: Initial cost Benefit at end of the first $500 $400 $300 200 200 200 100 4 year Uniform benefit at end of 100 125 subsequent years Useful life, in years 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?
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