Compare the following alterntives given a market rate of 5.45% per year and an inflation rate of 3% per year. Use firs...
- Compare the following alterntives given a market rate of 5.45% per year and an inflation rate of 3% per year. Use first the B/C method to determine feasibility and then the incremental B/C method to determine the oprimum level of investment.
|
Alt |
Construction Cost $ |
Annual Benefits $/yr |
Life yrs |
|
A |
105,000 |
40,000 |
5 |
|
B |
230,000 |
52,000 |
6 |
|
C |
350,000 |
64,000 |
7 |
|
D |
600,000 |
100,000 |
8 |
Homework Answers
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Compare the following alterntives given a market rate of 5.45% per year and an inflation rate of 3% per year. Use firs...
Compare the following alterntives given a market rate of 5.45% per year and an inflation rate...
Compare the following alterntives given a market rate of 5.45% per year and an inflation rate of 3% per year. Use first the B/C method to determine feasibility and then the incremental B/C method to determine the oprimum level of investment. Alt Construction Cost $ Annual Benefits $/yr Life yrs A 105,000 40,000 5 B 230,000 52,000 6 C 350,000 64,000 7 D 600,000 100,000 8
4. Compare the following altemtives given a market rate of 3.45% per year and an inflation...
4. Compare the following altemtives given a market rate of 3.45% per year and an inflation rate of 3% per year. Use first the B/C method to determine feasibility and then the incremental B/C method to determine the oprimum level of investment. Life yrs Alt A Construction Costs Annual Benefits S/yr 105,000 40,000 230,000 52.000 350.000 64,000 600,000 100,000 6
Compare the following 2 alternatives using the Net Present Worth (NPS) method – rate is 3%...
Compare the following 2 alternatives using the Net Present Worth (NPS) method – rate is 3% per year. Draw all cash flow diagrams. Please show work using a formula. Alt. Construction Cost ($) Benefit ($/yr.) Service Life (yrs.) A 380,000 200,000 7 B 450,000 220,000 7
5. Compare the following two alternatives by the IRR method, given MARR of 8%/year. Is the...
5. Compare the following two alternatives by the IRR method, given MARR of 8%/year. Is the incement in cost form A to B justified? Alt. Construction cost | Benefits Styr | Salvage Service Life (yrs 510,000 145,000 10,000 775,000 155,000 20,000
4. Apply incremental conventional B/C analysis at an interest rate of 8% per year to determine...
4. Apply incremental conventional B/C analysis at an interest rate of 8% per year to determine which alternative should be selected. Use a 20-year study period, and assume the damage costs might occur in year 6 of the study period. Alternative A 600,000 50,000 Alternative B Initial cost, S Annual M&O 800,000 70,000 costs, S/year Potential damage 950,000 250,000 costs, $ [Ans. Inc. B/C 1.11]
The real risk-free rate, r*, is expected to remain constant at 3% per year. Inflation is expected...
The real risk-free rate, r*, is expected to remain constant at 3% per year. Inflation is expected to be 2% per year forever. Assume that the expectations theory holds; that is, there is no maturity risk premium. Treasury securities do not require any default risk or liquidity premiums. Which of the following is most correct? The Treasury yield curve is flat and all Treasury securities yield 5%. The Treasury yield curve is upward sloping for the first 10 years, and then downward sloping....
I DO RATE. PLEASE ANWSER EVERYTHING CORRECT AND ORGANIZED SOLE RVEYTHING BY HAND NO SOFTWARE THANK...
I DO RATE. PLEASE ANWSER EVERYTHING CORRECT AND ORGANIZED SOLE
RVEYTHING BY HAND NO SOFTWARE THANK YOU
BONUS QUESTIONS 5a) A manufacturer of braided steel tire rubber molding equipment for automotive tire rubber fabrication in considering purchase either a semi-automatic or fully automatic system. The estima for each are as follows: Semi-Automatic Fully Automatic First Cost Annual Disbursement Annual Benefits Salvage Value Life $160,000 $ 3.000 $ 70,000 S 11,000 8 yrs $200,000 $ 6,000 $100,000 S 20,000 4 yrs...
1. 2. 3. 4. 5. Use this information for Kellman Company to answer the question that...
1.
2.
3.
4.
5.
Use this information for Kellman Company to answer the question that follow. The balance sheets at the end of each of the first two years of operations indicate the following: Kellman Company Total current assets Total investments Total property, plant, and equipment Total current liabilities Total long-term liabilities Preferred 9% stock, $100 par Common stock, $10 par Paid in capital in excess of par-Common stock Retained earnings Year 2 $600,000 60,000 900,000 125,000 350,000 100,000...
only need part b worksheet Illustration #3 Pepper Company, which is a calendar-year-reporting company, purchased 100%...
only need part b worksheet
Illustration #3 Pepper Company, which is a calendar-year-reporting company, purchased 100% of the common stock of Salt Inc. for $325,000 on 12/31/17. On the acquisition date, the following net assets of Salt had fair values different than book value: Cost FMV Inventory 80,000 75,000 Turnover 6 times per year Land 70,000 100,000 Building and equipment 220,000 210,000 10 year life Accumulated depreciation (60,000) Covenant-not-to-complete 40,000 4 year life Bonds payable 150,000 175,000 10 years to...
Construction is analyzing its capital expenditure proposals for the purchase of equipment in the coming year....
Construction is analyzing its capital expenditure proposals for the purchase of equipment in the coming year. The capital budget is limited to $5,000,000 for the year Lemon Baker, staff analyst at Hafners is preparing an analysis of the three projects under consideration by Corey Hafners, the company's owner. Projected cash outflow Project A Project B Project C Net initial investment $3,000,000 $2,100,000 $3,000,000 Projected cash inflows Year 1 $1,200,000 $1,200,000 $1,700,000 Year 2 1,200,000 600,000 1,700,000 Year 3 1,200,000 500,000...
4. Compare the following altemtives given a market rate of 3.45% per year and an inflation rate of 3% per year. Use first the B/C method to determine feasibility and then the incremental B/C method to determine the oprimum level of investment. Life yrs Alt A Construction Costs Annual Benefits S/yr 105,000 40,000 230,000 52.000 350.000 64,000 600,000 100,000 6
5. Compare the following two alternatives by the IRR method, given MARR of 8%/year. Is the incement in cost form A to B justified? Alt. Construction cost | Benefits Styr | Salvage Service Life (yrs 510,000 145,000 10,000 775,000 155,000 20,000
4. Apply incremental conventional B/C analysis at an interest rate of 8% per year to determine which alternative should be selected. Use a 20-year study period, and assume the damage costs might occur in year 6 of the study period. Alternative A 600,000 50,000 Alternative B Initial cost, S Annual M&O 800,000 70,000 costs, S/year Potential damage 950,000 250,000 costs, $ [Ans. Inc. B/C 1.11]
I DO RATE. PLEASE ANWSER EVERYTHING CORRECT AND ORGANIZED SOLE
RVEYTHING BY HAND NO SOFTWARE THANK YOU
BONUS QUESTIONS 5a) A manufacturer of braided steel tire rubber molding equipment for automotive tire rubber fabrication in considering purchase either a semi-automatic or fully automatic system. The estima for each are as follows: Semi-Automatic Fully Automatic First Cost Annual Disbursement Annual Benefits Salvage Value Life $160,000 $ 3.000 $ 70,000 S 11,000 8 yrs $200,000 $ 6,000 $100,000 S 20,000 4 yrs...
1.
2.
3.
4.
5.
Use this information for Kellman Company to answer the question that follow. The balance sheets at the end of each of the first two years of operations indicate the following: Kellman Company Total current assets Total investments Total property, plant, and equipment Total current liabilities Total long-term liabilities Preferred 9% stock, $100 par Common stock, $10 par Paid in capital in excess of par-Common stock Retained earnings Year 2 $600,000 60,000 900,000 125,000 350,000 100,000...
only need part b worksheet
Illustration #3 Pepper Company, which is a calendar-year-reporting company, purchased 100% of the common stock of Salt Inc. for $325,000 on 12/31/17. On the acquisition date, the following net assets of Salt had fair values different than book value: Cost FMV Inventory 80,000 75,000 Turnover 6 times per year Land 70,000 100,000 Building and equipment 220,000 210,000 10 year life Accumulated depreciation (60,000) Covenant-not-to-complete 40,000 4 year life Bonds payable 150,000 175,000 10 years to...
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