1) Four mutually exclusive alternatives are being evaluated, and their costs and revenues are itemized in the table below. Mutually Exclusive Alternatives IV $184,000 Investment (first) cost $100,000 Net annual receipts less costs Salvage value Useful life (years) $152,000 $220,000 $15,200 $31,900 $35,900 $41,500 $10,000 $0 10 $15,000 $20,000 10 10 10 a) What are the IRR values for these projects? Based on IRR values which alternative should be selected? b) If the MARR is X% (please see the table for your value) use the PW method to detemine which alternatives are economically acceptable and which one should be selected. c) If the total capital available is (initial cost of all alternatives were) $200,000, which alternative should be selected?
1) Four mutually exclusive alternatives are being evaluated, and their costs and revenues are itemized in the table below. Mutually Exclusive Alternatives IV $184,000 Investment (first) cost $100,000 Net annual receipts less costs Salvage value Useful life (years) $152,000 $220,000 $15,200 $31,900 $35,900 $41,500 $10,000 $0 10 $15,000 $20,000 10 10 10 a) What are the IRR values for these projects? Based on IRR values which alternative should be selected? b) If the MARR is X% (please see the table for your value) use the PW method to detemine which alternatives are economically acceptable and which one should be selected. c) If the total capital available is (initial cost of all alternatives were) $200,000, which alternative should be selected?
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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DONT USE EXCEL . just answer part (a).
Transcribed Image Text:1) Four mutually exdlusive alternatives are being evaluated, and their costs and
revenues are itemized in the table below.
Mutually Exclusive Alternatives
II
$184,000
II
$152,000
IV
$220,000
Investment (first) cost S100,000
Net annual receipts
less costs
Salvage value
Useful life (years)
$15,200
$31,900
$35,900
$41,500
$10,000
$0
$15,000
$20,000
10
10
10
10
a) What are the IRR values for these projects? Based on IRR values which
alternative should be selected?
b) If the MARRIS X% (please see the table for your value) use the PW method to
detemine which alternatives are economically acceptable and which one should be
selected.
c) If the total capital available is (initial cost of all alternatives were) $200,000, which
alternative should be selected?
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