29) The capitalized cost of an initial investment of $200,000 and annual investments of $30,000 forever at an interest rate of 10% per year is closest to: Select one: a. −500,000 b. −230,000 c. −200,000 d. −330,000
29) The capitalized cost of an initial investment of $200,000 and annual investments of $30,000 forever at an interest rate of 10% per year is closest to: Select one: a. −500,000 b. −230,000 c. −200,000 d. −330,000
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
Related questions
Question
29) The capitalized cost of an initial investment of $200,000 and annual investments of $30,000 forever at an interest rate of 10% per year is closest to:
Select one:
a. −500,000
b. −230,000
c. −200,000
d. −330,000
Transcribed Image Text:Question 27
given the following table which shows two alternatives, consider that the interest rate =10% per
Not yet
year.
answered
Machine X Machine Y
Marked out of
Initial cost, $
-80,000
-95,000
1.00
- 15,000
Annual operating cost, $ per year
Salvage value, $
Life, years
- 20,000
P Flag question
10,000
30,000
2
4
The equation that will calculate the present worth of machine X is:
Select one:
PWx = -80,000
30,000(P/F,10%,4)
15,000(P/A,10%,4) +
a.
PWx = -80,000 – 20,000(P/A,10%,4)
80,000(P/F,10%,2) + 10,000(P/F,10%,4)
-
b.
PWx = -80,000
70,000(P/F,10%,2) + 10,000(P/F,10%,4)
20,000(P/A,10%,4)
-
d. PWx
10,000(P/F,10%,2)
= -80,000
20,000(P/A,10%,2) +
-
![Question 28
Given the following table for two alternatives. consider that the interest rate
= 10%
Not yet
answered
Alternative
A
B
First cost, $
-90,000
-750,000
Marked out of
1.00
AOC, $/year
-50,000
-10,000
P Flag question
Salvage value, $
Life, years
8,000
2,000,000
5
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
+ 2,000,000/(1+0.10)®
а.
b. capitalized cost
-750,000 – 10,000/0.10 + 2000000 (0.10)
O C. = [-750,000(0.10) – 10,000]/0.10
d. capitalized cost = -750,000 – 10,000/0.10](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5ab2da25-2929-41be-ac1d-01dba2ea0d3e%2F3b8a8c42-6383-4fe8-afbf-192058f608bf%2Fc8grun_processed.png&w=3840&q=75)
Transcribed Image Text:Question 28
Given the following table for two alternatives. consider that the interest rate
= 10%
Not yet
answered
Alternative
A
B
First cost, $
-90,000
-750,000
Marked out of
1.00
AOC, $/year
-50,000
-10,000
P Flag question
Salvage value, $
Life, years
8,000
2,000,000
5
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
+ 2,000,000/(1+0.10)®
а.
b. capitalized cost
-750,000 – 10,000/0.10 + 2000000 (0.10)
O C. = [-750,000(0.10) – 10,000]/0.10
d. capitalized cost = -750,000 – 10,000/0.10
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