5. Compare the following 2 alternatives with a method of your choice. The market rate is 6% and inflation is expected to run at 2.5% per year. Alt A B Construction cost $ Benefits S/yr 450,000 380,000 2,000,000 1,500,000 Salvage 200,000 150,000 Life (yrs) 12 9

Q: c) d) Which project(s) would you select if you used the IRR methods. Why? If these were mutually…

A: Answer C: Project B should be selected as it has a higher IRR.

Q: Exercise 3: Cost benefit analysis (20%) A HKD20*10' (paid at time t-0) )power plant with a 5 year…

A: Initial Cost at t = 0, cashflow = 20000 Annual benifit from t =1 to 5, = 10000 Cost at the end of…

Q: An investment project has annual cash inflows of $4,100, $5,000, $6,200, and $5,400, for the next…

A: Year Cash flows 0  $ -8,900.00 1  $  4,100.00 2  $  5,000.00 3  $  6,200.00 4  $…

Q: 1. Given four different alternatives as shown in table below. Data A B C D Initial Cost $10,000…

A: Before investing in new projects or assets, profitability is evaluated by using various methods like…

Q: XYZ Co. is evaluating whether to invest in a project with the following information: Project cost =…

A: Price per unit = $200 Variable cost per unit = $150 Contribution per unit = Price - Variable cost =…

Q: Compute for the benefit ratio of the following projects. Project cost 5,000,000 2,000,000 1,000,000…

A: Hi, there, Thanks for posting the question. As per our Q&A honour code, we must answer the first…

Q: Zeda Enterprises has the option to invest in machinery in projects A and B but finance is only…

A: Here, Details of project A: Year Initial Investment Net Profit Depreciation 0  $…

Q: XYZ Co. is evaluating whether to invest in a project with the following information: Project cost =…

A: Given data: Project cost = $950,000 Project life = 5 years Fixed cost per year= $150,000 Required…

Q: Using Net Present Worth Analysis which alternative is best? Use an interest rate ot 8%. Alternative…

A: Interest rate = 8%

Q: Question 3 You are considering the following three mutually exclusive projects. The required rate of…

A: Internal rate of return is a method of capital budgeting used to determine the profitability of…

Q: 9. A four-year project requires $1,000,000 as the first cost and brings $2,000,000 at the end of the…

A: We can determine the IRR by rearranging the FV formula and solving for r.

Q: Fixed capital investment 320 000 € working capital 35 000 € scrap value 30 000 € for the project…

A: "Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Project A - 10,000 5000 4000 3000 Project B - 10,000 4000 3000 10,000 Project C - 10,000 3000 4000…

A: Mutually Exclusive projects are reflective of all such projects which are substitutes of each other…

Q: pm.5   Find the expected rate of return using the three estimates provided in the table below for…

A: Given data:Pessimistic First Cost = $1,052Most Likely First Cost = $1,000Optimistic First Cost =…

Q: An investment project costs $10,000 and has annual cash flows of $2,870 for six years. a. What is…

A: Year Cash flows 0  $ -10,000.00 1  $    2,870.00 2  $    2,870.00 3  $    2,870.00 4  $…

Q: 1. The alternatives shown are to be compared on the basis of their present worth values. At an…

A: Working Note : 1 .     Calculation of Depreciation on Project A…

Q: Ll 2 just need last one fixed

A: Discounted payback period- It is the period in which the initial cost incurred is recovered after…

Q: ces A firm evaluates all of its projects by applying the IRR rule. Year Cash Flow 161,000 0 55,000 1…

A: Cash Flow for Year 0 = cf0 = -$161,000Cash Flow for Year 1 = cf1 = $55,000Cash Flow for Year 2 = cf2…

Q: 8. By taking n as 30years and using 6% both as MARR and discount rate, compare the below three…

A: Capital budgeting indicates the evaluation of the profitability of possible investments and projects…

Q: 3. a) From the following estimates, determine the B/C ratio for a project that has a 20- year life.…

A: Note: The B/C ratio for this question has been computed using an interest rate of 5.50%.

Q: None

A: Answer to Part 1: Profitability Index (PI)The profitability index (PI) is calculated by dividing the…

Q: 0 1 4 -$ 425,000 44,000 62,000 79,000 540,000 The required return on these investments is 10…

A: NPV represents the value generated by a project for the business in absolute profitability terms.

Q: Which alternative in the table below should be selected when the MARR = 7% per year? The life of…

A: Internal rate of return is the discount rate at which the present value of the future cash flow and…

Q: Wildhorse Inc. now has the following two projects available: Project 1 2 Initial CF -11,320.43…

A: The NPV of a project refers to the measure of the profitability of the project calculated by finding…

Q: Problem 1. Multiple-Choice (82 Q1. If you invest $14,000 now into a project that will yield net…

A: Note: “Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered…

Q: Blossom, Inc. is considering purchasing equipment costing $90000 with a 6-year useful life. The…

A: PI is also known Profitability Index. It is a capital budgeting techniques which help in decision…

Q: If the Interest rate is 10%, what is the present value? (Use excel function) A Initial Cost 5300…

A: Net present value is the technique used in capital budgeting to evaluate the acceptability of the…

Q: None

A: profitability index=present value of cashflows/initial investmentYear Project Y A Present value…

Q: You have just been offered a contract worth $1.05 million per year for 7 years. However, to take the…

A: We are provided with the cash inflows for 7 years and we have to calculate the Maximum Initial…

Q: Calculate the discounted payback period for the following project: ICO: $45,000 WACC: 7% year ANOCFt…

A:

Q: What is the maximum amount a firm should pay for a project that will return $18,200 annually for 5…

A: Initial outlay or initial investment must be atleast should be equal to the present value of cash…

Q: Suppose you make a $5,000 investment that will return $3,000 in year 2 and another $3,500 in year 4,…

A: NPV is net of present value of future cash flows and cash outflows. Future cash flows are discounted…

Q: a. Which investment has the higher IRR? The IRR of investment A is ... %. (Round to the nearest…

A: In  capital budgeting and other type of analysis the internal rate of determ is said to be the date…

Q: A project has the following cash flows: Year Cash FlowS OL234 0 -$ 12,400 5,530 7,990 5,360 -1,500…

A: First of all, find the future value of all the cash inflows, take take it as the amount, assume…

Q: Waterway Industries is considering purchasing equipment. The equipment will produce the following…

A:

Q: 10. You must choose one of the 2 project proposals below. Interest rates are 10%. Which of t the…

A: With future value, annual interest rate (r) and annual period (n), the periodic payment or annuity…

Q: HW-Chp-8-1: A company is considering the following projects. If the MARR is 1 % / monthicompounded…

A: Capital budgeting is the process by which a corporation examines potential large projects or…

Q: 6. Since the minimum return rate is 6%, which of the following options is more appropriate? option A…

A: Rate = 6% Time Period = 5 years Value at end = 0   Option A Investment = 400 Annual Profit = 100.9…

Q: A firm is considering a six-year project with a payback period of 3.5 years. It has cash flows the…

A: Payback period means the period when the project is able to recover its initial investment without…

Q: 13- VMIC Corp. has asked you to look at the following data. The interest rate is 10%. 38 A Marginal…

A: The cost structures of existing asset and the new asset have been provided. We have to find the new…

Q: 1,356.95 2,618.83 5,237.66

A: The yearly cost of acquiring, running, and sustaining an project beyond its entire life is known as…

Q: TB MC Qu. 14-36 (Algo) Moates Corporation has... Moates Corporation has provided the following data…

A: A financial statistic called net present value (NPV) is used to evaluate the profitability of…

Q: At i = 10% per year and a loan amount of $10,000. If N= 20, what are the payments and future value?…

A: A sequence of payments of equal amounts in equal intervals of time can be called the annuity. Loan…

Q: Q5: The table below represents two alternatives for two construction projects: Find the best…

A: The long term projects are evaluated with the help of capital budgeting process. The process defines…

Q: Q10 Two major investment projects have the same initial outlay of €1,000 milion. The expected net…

A: Given:     Project A Project B Year Particulars Cash flows Cash flows 0 Initial investment -€…

Q: Determine which of the following two alternatives is the most efficient and which is the most…

A: Generally the project with higher IRR is better. Since Alternative A has higher IRR than Alternative…

Q: Which altenative in the table below should be selected when the MARR = 4% per year? The life of each…

A: MARR = 4% Time Period = 10 Years Increment Considered Δ(A-DN) Δ(B-A) Δ(C-B) Δ(D-C) Δ Investment…

Q: Alternative A Initial cost Life span Maintenance cost 150000 15 yrs 10 grs 1500 2500 Interest rate =…

A: Equivalent annual cost refers to the calculated annual expense of a project or investment, expressed…