1. Two anti-pollution project proposals are being considered by Energon Industries. The expected cash flows are as follows: End of Year Project 1 Project 2 0 - P3.5M - P4.5M 1 - 0.25M - 0.125M 2 - 0.375M - 0.25M 3 - 0.5M - 0.375M 4 - 0.625M - 0.5M 5 - 1.55M - 0.625M Using the incremental investment approach and a 12 % MARR, determine the better alternative. (Ans. i2-1=9.17% ; select Project 1)
1. Two anti-pollution project proposals are being considered by Energon Industries. The expected cash flows are as follows: End of Year Project 1 Project 2 0 - P3.5M - P4.5M 1 - 0.25M - 0.125M 2 - 0.375M - 0.25M 3 - 0.5M - 0.375M 4 - 0.625M - 0.5M 5 - 1.55M - 0.625M Using the incremental investment approach and a 12 % MARR, determine the better alternative. (Ans. i2-1=9.17% ; select Project 1)
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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41. Two anti-pollution project proposals are being considered by Energon Industries. The expected cash flows are as follows:
|
End of Year |
Project 1 |
Project 2 |
|
0 |
- P3.5M |
- P4.5M |
|
1 |
- 0.25M |
- 0.125M |
|
2 |
- 0.375M |
- 0.25M |
|
3 |
- 0.5M |
- 0.375M |
|
4 |
- 0.625M |
- 0.5M |
|
5 |
- 1.55M |
- 0.625M |
Using the incremental investment approach and a 12 % MARR, determine the better alternative.
(Ans. i2-1=9.17% ; select Project 1)
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