A steel company is trying to decide between two industrial type cranes. Crane A and Crane B are mutually exclusive, and the economics estimates for each are shown below.Crane ACrane BCapital investmentAnnual expensesSalvage valueLife, in years$15,000$35,000$5,000$7,000$4,00020If the MARR is 15%,1-The present worth of the Crane A Capital investment and Annual expenses over 5 years is65,295.8339,765.3-38,465.4-14,085.8Crane A2-The present worth of Crane B over 20 years is $3-The present worth of Crane A over 20 years is $105,18.0253,104.2-66,296.5Crane B28,067.8114 336.155,101.561,695.7-40,67324-The recommended alternative is

Present Worth: It is the present value of the investment's annual cash flows and the initial cost.…

Answered: 1-The present worth of the Crane A…

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

See similar textbooks

Similar questions

An investor is considering the development of a recreational complex with the following relevant data initial cost is P54M estimated life is 15 years salvage value is P2 5M yearly costs for operations and maintenance is P3 5M annual property tax is 4% of first cost insurance premium (payable at the start of the year) is 2% of first cost expected yearly revenue is P15M If the investor applies a 10% MARR determine the annual worth of this venture
answer an discuss pls
I need the answer quickly
Assume that property investor expects NOI to be $55 000, $64 000 and $67 000 for next 4 years with capitalisation rate of 11%, holding period expected to be 32 years with annual appreciation of 3% and sale commission of 6%. Would you buy the property if owners would like to sell it for $520 000?
Two investment opportunities are as follows: A B First cost $150 $115 Uniform annual benefit $26 $20 End-of-useful-life salvage value $O SO Useful life, in years 10 10 If the MARR is 13%, which alternative should be selected?
You Answered Some particulars for a project are as follows. Initial Capital Cost in year 0 ($Mn) Follow-up 'one-off' cost in year 1 ($Mn) Annual Operating Cost ($Mn/yr) Annual Benefits ($Mn/yr) Correct Answers Project Closure Cost, at end of project life ($Mn) Useful Life (years) Interest/Discount rate (percent) 1000 300 10% of capital cost 400 2,391 (with margin: 5) 200 20 7 What is the Life Cycle Cost of the project - expressed in present value term? (your answer must be rounded off to the nearest million dollars, i.e., no decimal places)
Alternative X has a first cost of 36000 an annual operating cost of 6900, and a salvage value of 11025 after 13 year. Alternative Y has a first cost of 37000 an annual operating cost of 7000, and a salvage value of 16280 after 13 year. If MARR of 13% per year, approximately what is the PW of each alternative? Select one: O a. PW of X= -77518 and PW of Y= -78067 O b. PW of X= -75990 and PW of Y= -76529 O c. PW of X= -76750 and PW of Y= -77294 O d. PW of X= -78293 and PW of Y= -78848
The following table summarizes the financial data for a proposed new asset. The issue is how long the asset should be kept. Assume an interest rate of 12% and delermine the economic service life of the anset. End of YearN) Investment cost O&M Cost Salvage value $14,000 $3.400 $8.000 $4600 $6.000 $5.800 $4,000 01 year O2 years 3 years O Not enough information
Given the following table for two alternatives. consider that the interest rate = 10% Alternative A B First cost, $ -90,000 -750,000 AOC, $/year -50,000 -10,000 Salvage value, $ Life, years 8,000 2,000,000 00 All of the following equations for calculating the capitalized cost of alternative B are correct, except: Select one: = -750,000 – 10,000/0.10 a. + 2,000,000/(1+0.10) b. = [-750,000(0.10) – 10,000]/0.10 c. capitalized cost = -750,000 – 10,000/0.10 + 2000000 (0.10) d. capitalized cost = -750,000 – 10,000/0.10
Maintenance cost for small bridge with an expected 50 year life are estimated to be $15,000 each year for the first 8 years, followed by a $20,000 expenditure in the year 18 and a $30,000 expenditure in the year 28. If interest rate is at 10% compounded monthly. What is the equivalent present value of the entire maintenance cost of that bridge?
answer must be in proper format or i will give down vote
18. Determine the capitalized cost of a bridge whose cost is P200 Million and its life is 50 years, if the bridge must be partially rebuilt at a cost of P100 Million at the end of each 50 years, and an annual maintenance cost is P500,000 and it will be needed to be repair every 10 years for P2 Million. i = 6%

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

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

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS

1-The present worth of the Crane A Capital investment and Annual expenses over 5 years is 2-The present worth of Crane B over 20 years is $ 3-The present worth of Crane A over 20 years is $ 4-The recommended alternative is