#1: An investment will cost $10,000 today for equipment plus expenses for labor and materials at a continuous annual rate of $2,000 per year for the next four years. The project will begin earning back money at a continuous rate of $3,000 per year beginning four years from now and continuing forever. Assuming an annual effective rate i = 2%, calculate the discounted payback period.

#1: An investment will cost $10,000 today for equipment plus expenses for labor and materials at a continuous annual rate of $2,000 per year for the next four years. The project will begin earning back money at a continuous rate of $3,000 per year beginning four years from now and continuing forever. Assuming an annual effective rate i = 2%, calculate the discounted payback period.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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answer an discuss pls
A project requires an up- front investment of $20,000 and provides cost savings of $3000 after two years, and then $3000 each year thereafter. Find the discounted payback period when the MARR = 10%.
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(4) Evaluate the ROI.
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An investment project provides cash inflows of $3,000 per year for five years. What is the payback period if the project requires $5,000 at the beginning of the project?
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Calculate the capitalized cost of a project that has an initial cost of P3,000,000 and an additional cost of P100,000 at the end of every 10 years. The annual operating cost will be P100,000 at the end of every year for the first 4 years and P160,000 thereafter. In addition, there is expected to be recurring major rework cost of P300,000 every 13 years. Assume i=15%.

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