8-27Three mutually exclusive alternatives may replace the current equipment.Year A0123B4C-$20,000-$24,000-$25,00010,000 10,000 5,0005,000 10,000 5,00010,000 8,000 5,00025,000(a) Construct a choice table for interest rates from 0% to 100%.(b) If the MARR is 12%, which alternative should be selected?5,000 5,000

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Answered: 3- 27 Three mutually exclusive…

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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If the interest rate is 6% and the loan amount is $10,000, how much interest would accumulate in two years, assuming simple interest and no repayments? select the correct or the closest answerQuestion 19 Select one:a.1500b.200c.1200 d.2200e.1800
Answer a) and b) Problem 3: Interest Swap Companies A and B have been offered the following rates per annum on a $50 million five-year loan: Company A Company B Floating LIBOR +0.7% LIBOR +1.0% Fixed 6.0% 7.5% Company A requires a floating-rate loan and company B requires a fixed-rate loan. a) Design a swap that will net a bank, acting as an intermediary, 30 basis points (0.3%) per annum and that is equally attractive to the two companies. Illustrate the swap with a diagram. b) Determine the effective financing costs for A and B.
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need both
Q: Which Is the better option to consolidate debt? Option 1: You have a loan at $21,000 at 16.24% (APR) 3 year term, Making the minimum payment monthly. Option 2: You have two loans; 1: $10, 700 at 8.99% (APR), 3 year term, Making the minimum payment monlthy. 2: $ 10,300 at 12.24% (APR), 3 year Term, Making the minimum payment monthly. Which option saves the most in interest, which is the better option to save the most money?
8. By taking n as 30years and using 6% both as MARR and discount rate, compare the below three possible alternatives by using NPV (net present value) and IRR methods, and recommend the best possible alternative. Types of cashflows Alternatives Alternative A Alternative B Initial capital Annual operation and ETB 40,000 Alternative C ETB 5,000,000 ETB 7,000,000 ETB 11,000,00O ЕТВ 150,000 ЕТВ 100,000 maintenance cost Annual benefit ЕТB 560,000 ЕТB 800,000 ЕТВ 1,050,000
Please do not give solution in image format thanku
2. In the figure below, Alternative C has a discounted payback period of approximately: years $50,000 S0 -550,000 -$100,000 -S150,000 -$200,000 A B -$250,000 E -5300,000 -$350,000 -$400,000 -$450,000 Investment Year Alternative A Altemative B Alternative C True or False 3. In the same figure above, Alternative C is the most profitable alternative at the end of the planning horizon 4. In the cash flow approach, I would be losing money if I don't sell the "defender" equipment
Computing Present Value of Single Amount under Different Assumptions Consider the following four separate investment scenarios. Compute the present value under each of the four separate investment options. Note: Round final answer to the nearest whole dollar. Note: Do not use a negative sign (-) with your answers. Future Annual Investment Investment Amount Compounding Interest Rate Period (Years) Investment A $50,000 Annually 5% Semiannually 6% Quarterly 8% Monthly 12% Investment B 250,000 Investment C 300,000 Investment D 400.000 10 10 $ A A Present Value
What is the value today of receiving $4,000 at the end of two years, assuming an interest rate of 4% compounded semiannually? (FV of $1, PV of $1, FVA of $1, and PVA of $1). (Use appropriate factor(s) from the tables provided.) Multiple Choice $3,695 $4,195 $640 $3,698 tv A
Question 4a) A firm has a choice between two investment projects, all of which involve an initial outlay of GH¢36,000. The returns at the end of the next 4 years are given below. If the interest rate is 15%, say whether each project is viable or not, and which is the best investment.Year Project A Project B1 15,000 5,0002 15,000 10,0003 15,000 20,0004 15,000 25,000All values are given in GH¢. b) A factory increase its production by 712% and produced 1290 tonnes. How many tonnes did she produce before? c) If we place GH¢100 in the savings account that yields 12% compounded quarterly, what nearest GH¢ would our investment grow to at the end of 5 years?

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